Warning for telcos

Complaints about telecommunications companies (telcos) are on the rise, and so too is the Commission’s focus on telco compliance with consumer laws.

Telco report numbers continue to rise, as shown in the Commission’s 2016 Consumer Issues Report. Fair Trading Act complaints about telecommunications providers have increased by 20% (79 complaints) from 2014, and have doubled from 2013 levels (from 234 to 459).

Commission Head of Investigations Ritchie Hutton says there has been a re-emergence of serious compliance issues.

“Currently we have a number of high level telco consumer investigations underway and some appear to emulate Trustpower’s misleading ‘split price’ promotion from last year,” says Mr Hutton.

Energy and broadband provider Trustpower Ltd was fined $390,000 in late 2016 for an electricity and broadband offer with a headline price of $49 per month for 12 months, but rising to as much as $79 per month for the remaining 12 months of the contract.

Competitors need to ensure they make their own informed decisions about whether their marketing is compliant.

Telco complaints were prominently mentioned at the Commission’s recent appearance before the Commerce Select Committee, on 9 February.

Commission Chairman Dr Mark Berry told committee members that the Commission is concerned about the volume of complaints generated in the telco sector.

“While we have engaged closely with telco firms for many years now with the goal of improving their compliance processes outside of litigation, we continue to see routine breaches,” Dr Berry said in his opening comments to the committee.

He told MPs that the Commission is evaluating its general enforcement approach in this sector.

The Commission intends to continue to effectively respond to harmful conduct; improve industry compliance; increase visibility of the Commission’s work; and increase the Commission’s understanding of telco non-compliance.