Friday, June 03, 2011

Australia - "Confusopoly" with misleading adverts by operators

[] AUSTRALIAN telecommunications users are living in a "confusopoly" in which "bill shock" is common and advertising practices can be misleading, an industry regulator says.

Many consumers do not and cannot fully understand the services that they purchase, nor do they comprehend charging arrangements, the Australian Communications and Media Authority said in a draft report today.

The authority chairman Chris Chapman said consumers were "long suffering and very frustrated".

"Confusopoly has been a reality," Mr Chapman said at the release of the report, which follows a year long inquiry into the industry's customer service and complaint handing problems.

The federal government agency is recommending a slew of changes, such as expenditure tools for consumers so they can monitor their costs and the introduction of improved disclosure information about the charges associated with plans.

The authority also wants to prohibit what it says are misleading advertising practices, such as the use of the term "cap" on mobile and broadband plans.
"It's not a cap, it's not a maximum, it's a minimum," Mr Chapman said.

"We want to prohibit that unless its a genuine hard cap, so that if you exceed your limit the service ends or you get the opportunity to upgrade."

The report also points towards the use of the terms "unlimited" and "free", when there are, in fact, limitations and when costs are imposed on consumers elsewhere.
Consumers' understanding of products could be improved by advertising that is clear, accurate and honest, the authority said.

Mr Chapman said regulatory frameworks were required to combat advertising practices that are unlawful or deliberately misleading.

The report follows on from almost 210,000 complaints and inquiries to the Telecommunications Industry Ombudsman in 2009/10, which the authority called "remarkably high".

"The raw statistics suggest that the Australian telecommunications industry is not delivering good customer care and that many consumers are dissatisfied," the report states.
It also said many consumers believe service providers "are as bad as each other", with people unwilling to change telecommunication companies due to the high costs associated with contract lock-in periods.
Mr Chapman said change would require behavioural shifts in the telecommunications industry and strong regulatory oversight by the Australian Communications and Media Authority.

"We are confident that the industry will respond positively to the challenge," Mr Chapman said.

"The die is cast, we put it all out there in the report ... the clock is ticking."
The draft report, Reconnecting the Customer, will be available for submissions until July 15, with the final report expected to be released in August.

Australian telecommunications users living in a 'confusopoly', says industry regulator

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