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Telecommunications Could Be Next For A Royal Commission As Dodgy Practices Flourish

Recently, I was struck by the story of a young man trying to get his feet back on the ladder and land a job after spending some time unemployed. He was getting by on the basic Newstart Allowance, less than $275 per week, and to ensure he was contactable and could promptly communicate with potential employers, he purchased a budget mobile plan.

Unfortunately, he was – like so many Australians – on a “too-good-to-be-true” plan, where the detail within the fine print led to bill shock through an array of unexpected charges. The expected $25 monthly bill had turned into a $170 horror.

Unable to pay, his plan was eventually cancelled, so he couldn’t make, receive or return calls from potential employers.

The story told me two things. Firstly  a telecommunication service in the 21st century, especially a mobile service, is no longer a “luxury”; it is an essential service, akin to electricity, gas and water.

Secondly our big telcos’ systemic practice of using misleading advertising disadvantages the most vulnerable in society who often have the most need of immediate communication, such as the unemployed; the elderly who may need to seek assistance and the young, to remain socially connected in today’s world.

The ACCC’s decision last week to officially put telecommunications companies on notice to ensure their advertising is clear and transparent came as no surprise and proved what we’ve known for years Australia’s big telcos are misleading consumers and businesses at every turn.

The decision arose primarily from certain telcos’ misuse of the word “unlimited” in their advertisements.

But they are using hoodwink headline offers that hide the “gotcha” detail to take advantage of busy people, who don’t have time to decipher a complicated set of terms and conditions before signing up.

Unless you work in the industry, it’s near impossible for most people to understand the fine print and telcos are preying on this ignorance.

The cost of a necessity

Australians are ahead of the rest of the world when it comes to mobile use – Deloitte’s 2018 Technology, Media and Telecommunications Predictions report indicated smartphone penetration in Australia will exceed 90 per cent this year, while the rest of the world won’t catch up until 2023.

Telcos are taking advantage of our propensity for mobile technology by offering budget plans that make false claims about how they can satisfy it.

Vulnerable people are far more likely to fall victim to budget plans that promise more than they can realistically deliver.

Receiving a bill with unexpected charges can be an upsetting experience, and people who do are likely to struggle to find answers from telcos’ infamously poor customer service, most of which is now handled from abroad, further impeding the process.

The devil here is in the detail. For example, many of us would believe that calls to 1300 or 1800 numbers from a mobile are “free” or included in a capped plan. But many plans, particularly on the lower end, charge these calls on top of the agreed amount.

It’s something of an insidious irony that vulnerable people falling victim to these plans might have to use these numbers to reach call centres and help lines.

These plans also often come with a 12 or 24-month lock-in contract, forcing customers into debt with their telco and/or stuck in an overly-expensive but ultimately worthless plan for years.

When combined with the ever-increasing prices of mobile devices, now over $2000 for the latest and greatest model, it’s easy to find yourself paying too much for a necessity.

Time for a royal commission?

The widely-publicised banking royal commission has unveiled shocking, and often insidious, practices from within our financial services sector.

The new Morrison government appears intent on shining a similar light on other industries, calling for a royal commission into the aged care sector and threatening to do the same in the energy sector.

My concern is that telecommunications is next, and my fear is what will be uncovered.

The Telecommunications Industry Ombudsman already receives approximately four times the number of complaints than its counterpart in financial services, almost one every three minutes according to the most recent data.

While complaints don’t automatically justify a commission, horrendous customer service paired with the ACCC being forced to keep watch paints a poor picture and perhaps a royal commission is needed.

Whatever happens, it’s clear our big telcos are failing us – these organisations are supposed to be paving the way for the new digital era, 5G, AI, IoT, smart cities and everything else that comes with it.

Our news feeds aren’t full of this. They’re full of job cuts, poor financial results and corporate mergers far more likely to be geared towards corporate interests than improving customer services.

Telcos are out of touch with what people want and need, to the detriment of both their customers and businesses. It’s time we demand more and that the telco industry puts an end to disgraceful practices such as those called out by the ACCC.

Our focus should be on developing the right partnerships, adopting the right social licence, investing in new technologies and most importantly investing in Australia. – Financial Review

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