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Consumers left holding the line while self-regulation fails.

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Senator Stephen Conroy Deputy Opposition Leader in the Senate Shadow Minister for Communications and InformationTechnology

Consumers left holding the line while self-regulation fails

Today’s registration of the ACIF Consumer Contracts code is the culmination of six years of inadequate regulation of unfair consumer contracts by the Federal Government.

Recent evidence heard by the Senate gave a damning account of the effectiveness of the self-regulatory regime administered by ACIF. Leaving the foxes in charge of the hen house has resulted in a shockingly slow and largely ignored self-regulatory regime.

The need for regulation of unfair contracts has been recognised by the industry since 2000. Common unfair contract terms in Australia include terms that:

• Can be changed at will by the service provider. • Require that customers pay even where services are not provided. • Force customers to take on completely unreasonable liability terms.

Yet it has taken almost five years to even develop an enforceable code to attempt to deal with these issues (a timetable of the development of this code is attached). It is extraordinary that Senator Coonan could describe this code as a “timely outcome”.

As currently structured the self-regulatory regime has failed to protect consumers from the actions of telecommunications providers.

It is becoming clearer by the day that the only priority for Senator Coonan is maximising Telstra’s sale value. She will sell out consumers in order to sell Telstra.

Every Australian has experienced the level of customer service provided by telecommunications companies. The situation will only get worse after the privatisation of Telstra.

If the Government was serious about good telecommunications policy it would follow the lead of the Victorian government and introduce legislation to protect consumers from conduct like this. ACIF cannot be relied upon in areas as important as unfair contracts and unexpectedly high bills.

4 May 2005

Further information: Stephen Conroy on (02) 6277 3295 or 0418 383 965

Wednesday 4 May 2005

Time line of the development of the ACIF code

November 2000 • The Communications Law Centre lodged with ACIF’s Consumer Codes Reference Panel (CCRP) the results of a research report funded by the Department of Communications, Information Technology and the Arts (DCITA) and the Telecommunications Industry

Ombudsman (TIO) titled “Unfair Practices and Telecommunications Consumers”. This report recommended that regulation be introduced to address this issue.

December 2002 • ACIF issued the Consumer Contracts Guideline (voluntary code not enforceable by the ACA).

• The ACA commissioned the Communications Law Centre to undertake a review of carriers’ compliance with this guideline. The report found that carriers largely disregarded the code. The ACA described the results of this review as “disappointing” and that they “show there is a need for significant improvement in the contractual environment for consumers.”

• On this basis the ACA determined that “it is unlikely that a voluntary industry code would be developed within a reasonable period in the absence of a formal request (from the ACA)”.

November 2003 • As a result of this report the ACA directed ACIF to produce an enforceable Code on Consumer Contracts in November of 2003 and submit it for registration by the ACA within 180 days (ie by May 2004).

May 2004 • Deadline for code development was extended to October 2004 as a result of a lack of progress by industry.

October 2004 • Deadline for code development again extended until February 2005 due to further lack of progress.

February 2005 • ACIF finalises Consumer Contracts Code and submits it to the ACA for registration.

April 2005 • ACA registers Consumer Contracts Code.

October 2005 • Even now that the ACA has registered this code, telecommunications service providers will now be given a further 6 months during which to conform their contracts to the Code.