Direct Regulation for Financial Hardship – ACMA Puts Telco Industry on Notice

A person's hands typing on a mobile phone
A person's hands typing on a mobile phone

Telecommunications are a vital part of modern life, connecting communities, and playing intrinsic roles in work, education, and access to emergency services. Despite this, and despite the requirement that telcos notify consumers about support and hardship arrangements, more than 25% of Australian adults (including those who had experienced some financial hardship in the last 12 months) don’t know that they can contact their telco provider for help managing financial difficulties. Now, the Federal Government has empowered the Australian Communications and Media Authority (ACMA) to make a directly enforceable standard for financial hardship.

Under the new standards the ACMA will have more powerful enforcement tools for direct regulation to better ensure industry compliance. These powers will include remedial directions, enforceable undertakings, and financial penalties set by the Federal Court.

The ACMA and consumer advocacy groups have welcomed the move, with the Australian Communications Consumer Action Network (ACCAN) CEO Andrew Williams quoted as saying:

“Establishing substantive protections for telco consumers will support as many as 2.4 million Australians who have had difficulty or struggled to pay a telco bill in the last 12 months.”

“Better protections for consumers facing financial hardships are a good step forward, and ACCAN looks forward to working with the government and industry on advancing the public interest.”

In the ACMA’s position paper, Chair Nerida O’Laughlin said:

“Given the current impact of cost-of-living pressures we will move quickly to implement the new rules to give early and stronger protection for these consumers.

“Telco improvements on other matters raised in our position paper are also urgent and cannot wait until the proposed TCP Code review end date of late 2024.

“We expect the industry to demonstrate significant progress towards addressing these issues in the next six months. If the industry is unwilling to do so, we believe there is compelling evidence to support moving these protections into direct regulation.”

Regulators and consumer advocates also look forward to how these new enforceable standards can be used to better assist consumers experiencing domestic and family violence.

The government has attributed the impetus for these changes in large part to the release of the ACMA’s report Financial hardship in the telco sector: Keeping the customer connected in May 2023 alongside the ifndings of the Telecommunications Industry Ombudsman (TIO), the Australian Competition & Consumer Commission (ACCC) and consumer groups including ACCAN and Consumer Action Law Centre (CALC).