The Australian Communications and Media Authority has formally warned iiNet Ltd and Dodo Services Pty Ltd for failing to comply with the direct debit provisions of the Telecommunications Consumer Protections Code (TCP Code).

The TCP Code requires providers to comply with a customer’s authorisation when offering a direct debit payment facility. This includes cancelling an authorisation within three working days upon request and giving customers at least 10 working days to check their bill before the direct debit transaction occurs, unless the customer and provider have agreed on a different timeframe. In addition, providers are not permitted to take credit management action in relation to a disputed amount.

The warnings were issued after separate ACMA investigations.

The ACMA found that Dodo Services:

  • did not comply with a customer’s authorisation regarding direct debit on 12 occasions between June and September 2013
  • did not cancel a direct debit authorisation within three working days on seven occasions between December 2012 and September 2013.

The ACMA found that iiNet:

  • did not comply with a customer’s authorisation regarding direct debit on four occasions between June and August 2013
  • did not cancel a direct debit authorisation within three working days on three occasions between June and September 2013
  • did not allow customers at least 10 working days to check their bill before the associated direct debit occurred on 96 occasions during July 2013<
  • took credit management action on a disputed amount on five occasions between June and October 2013.

‘Many providers are now offering services to customers on a direct debit basis only. Those providers need to understand that it is critically important their direct debit practices comply with the TCP Code’, said ACMA Chairman Chris Chapman.

Since the investigations, Dodo Services and iiNet have both taken action to ensure direct debit related breaches do not recur.

These investigations form part of a series in which the ACMA has been targeting providers’ direct debit practices.