The Minister for Communications will direct the Australian Communications and Media Authority (ACMA) to make an enforceable industry standard to ensure appropriate support is provided to telecommunications customers experiencing financial hardship.
Telecommunications are an essential part of everyday life and staying connected is no longer a luxury - it is a necessity to support education, work and access to critical services.
The Albanese Government is committed to ensuring Australians struggling with increased cost of living have access to appropriate safeguards.
This decision reflects that priority by elevating financial hardship obligations to direct and enforceable regulation, which will deliver better outcomes for consumers more quickly.
In May 2023, the ACMA released Financial hardship in the telco sector: Keeping the customer connected. The report used data sourced from telecommunications providers and independent surveys by Roy Morgan and OmniPoll Pty Ltd, and identified the following:
- The rates of telco financial hardship are significant but only a small proportion of customers receive hardship support.
- 25% of Australians experienced payment difficulty or concerns in the previous 12 months for their essential service bills and 48% of those had difficulty with their telco bills. Industry data from the key telcos showed only 4,388 customers were in financial hardship programs as at 30 June 2022 (0.03% of all residential customers).
- Industry is required to inform customers about hardship arrangements, however many customers are still unaware they can contact their telco for help.
- Only 57% of Australian adults and 64% of those who experienced financial hardship in the past 12 months were aware they could contact their telco provider for help in managing financial difficulties.
The report's findings aligned with those from the Telecommunications Industry Ombudsman (TIO), the Australian Competition & Consumer Commission (ACCC) and consumer groups including Australian Communications Consumer Action Network (ACCAN) and Consumer Action Law Centre. The Government acknowledges the contributions of all stakeholders in this space.
While telecommunications services have not been a central contributor to the increase in household spending, this decision looks to ensure that consumers doing it tough can stay connected to essential telco services.
The Government encourages industry and consumer stakeholders to work constructively with the ACMA on the development of the financial hardship standard.
Today, the ACMA has also published a position paper which clearly outlines expectations it has for industry to address a range of issues through the current review of the Telecommunications Consumer Protections (TCP) Code - which is due for completion in 2024.
The Government will continue to actively consider the consumer safeguards framework and engage with stakeholders on tangible steps that can be taken to improve consumer outcomes - including to consider calls for reform of penalties and code enforcement, establishing a retailer registration scheme and providing better information to consumers.
Quotes attributable to Minister for Communications, the Hon Michelle Rowland MP:
"Telecommunications are an essential part of life.
"Given the current cost of living pressures that many Australians are facing, it's important we have clear and enforceable rules so telcos give appropriate support to consumers doing it tough.
"That's why I have directed the ACMA to ensure the appropriate safeguards are in place, and I will continue to take a close look at the consumer safeguards framework to ensure it is fit for purpose.
"I welcome the position paper published today by the ACMA which outlines necessary improvements to the Telecommunications Consumer Protection (TCP) Code, and related industry practice. I also thank the ACMA for its work in preparing for the TCP Code review and I thank Communications Alliance for its efforts in leading the process.
"If a consumer is experiencing financial hardship and needs help with their telco bill, they should contact their service provider to discuss what arrangements are available. If a consumer is unable to come to a satisfactory arrangement directly with their provider, they should then contact the Telecommunications Industry Ombudsman (TIO) for assistance."
