The TIO received a record number of new complaints in 2010-11, 197,682 or a substantial 17.8 per cent increase compared to the previous year, reversing the 4.6 per cent decrease in new complaints we reported in 2009-10. This sharp increase can almost exclusively be attributed to a rise in complaints about mobile phone services. In other areas, we recorded continuing downward trends in complaints about dedicated internet (such as cable, wired ADSL and wireless broadband) and landline services, as a result of changes in industry and consumer behaviour. We also conducted fewer investigations than in previous years, due to improved service provider cooperation in resolving referred complaints and changes within the TIO in the form of improved procedures.
Consistent with the growth in the mobile phone market, more than half the complaints we received this year – 112,376 – were exclusively about mobile phone services, an increase of 51.4 per cent from the previous year.
This spike in complaints about mobile services was largely caused by two important factors: Vodafone’s network issues and the increased market share of smartphones.
New complaints about Vodafone mobile services almost tripled in 2010-11 to 32,744. They peaked in January 2011 with a total of 5,712 new complaints, coinciding with the provider’s much publicised network and customer service issues. While new complaints about Vodafone took a downward turn in February with 4,205 new complaints, their complaint levels in June 2011 – 2,783 new complaints – were more than double the number received at the same time in the previous year.
However, Vodafone was not alone in receiving more complaints. We observed growth in mobile complaints more generally and many of the issues we have seen appear to be related to the growth in the market, which has been driven by smartphones.
The issue with the largest increase in mobile phone complaints was faults, with 56,475 issues raised or a 180.7 per cent increase from the previous year. The two most common complaints in this area include poor coverage (28,634 issues or a 609.6 per cent increase) and dropouts (6,941 issues or a 482.8 per cent increase).
Ramon’s complaint is an example of this issue
There have also been increases in billing disputes in mobile phone services. The top three issues are disputes about the total of a bill (10,425 issues or a 52 per cent increase), termination fees (5,748 issues or a 9.6 per cent increase) and internet usage from a mobile phone (4,222 issues or an increase of 26 per cent). This last statistic is unsurprising, as more consumers are accessing the internet from their smartphones – 71 per cent according to a 2011 Google/Ipsos study4.
We have noticed an alarming increase in the number of consumers complaining about high debts due to not being able to monitor their usage adequately, the majority from mobile phone users. Of the 10,469 issues reported to us about inadequate spend controls, 7,844 were exclusively about mobile services – an increase of 119.8 per cent compared to the previous year. This trend can, at least in part, be attributed to service providers offering new technology without giving adequate information to consumers, either at point of sale or when using their phone, about the charges they may incur.
In contrast, new complaints about internet services (wired such as home ADSL or wireless internet such as dongles) are down 13.1 per cent to 37,092. This may be attributed to the industry offering affordable internet plans with generous data allowances, either as part of bundled packages or standalone deals, now being offered by the industry.
Complaints about landline services have had a small decline of 1.7 per cent, coinciding with a decline in overall landline subscriptions5 resulting from the continuing trend of high mobile service take up.
The most significant decline was in new complaints about mobile premium services (MPS) ¬– 2,174 or a 45.6 per cent decrease. This builds on the 70.5 per cent decrease in MPS complaints we reported in 2009-10 and further reflects the positive effects of stronger regulation from the ACMA with service providers required to contract registered MPS providers, stronger self-regulation in the form of an improved industry code, and a decline in consumer demand for mobile premium services as a result of increased use of applications in smartphones.
We have also seen a decrease in cases that we need to investigate as a result of improved responsiveness from service providers to our referrals and other changes to our processes. In 2010-11 we investigated 20,635 cases, a decrease of 14.8 per cent. Our email referral process and our conciliation process provide fast, flexible options for consumers and service providers to resolve their disputes. These figures also demonstrate that service providers are responsive when the TIO is involved.
The growth of the mobile market and the complaints that we received about these services present a challenge that the telecommunications industry must respond to. Migration of consumers to mobile devices looks set to continue in even higher numbers, and if the issues we have seen in 2010-11 are not addressed, complaint levels may continue to rise.
Frustratingly for everyone concerned, some of the most common issues identified by consumers who come to us have not changed. These include simple matters about:
We know that most consumers spend a great deal of time and energy trying to resolve their complaints with their service providers before coming to the TIO. They are often forwarded from one department to another and unable to speak with the right person who can deal with their issues.
Our experience tells us that 90 per cent of these complaints are easily resolved once a consumer comes to the TIO and we refer their complaint to the right person within their service provider. These complaints should not have come to the TIO in the first place.
A key focus of our office is to monitor the trends in complaints about unusually high debts and bill shock. These issues have the power to cause significant detriment to consumers, particularly vulnerable and disadvantaged ones. The key areas that consumers have complained about include:
While these numbers may appear low in the context of hundreds of thousands of complaints, the impact they can have can be tremendous. A substantial telecommunications debt can throw a low income consumer into further financial hardship, or it can affect a consumer’s ability to obtain credit, such as a home loan, because default listings are kept for five years.
While the industry has shown great innovation in offering us these new, exciting and better life-changing technologies, there is a clear need for its sales and customer service areas to keep up with this fast changing environment to avoid consumer detriment.
The Australian Communications and Media Authority’s (ACMA) Reconnecting the Customer inquiry has clearly made the case for change and has identified the issues that need attention. Its recommendations to improve the quality of information, advertising and spend management tools point to a clear path forward. Integral to this is improving customer service and complaint handling for consumers.
We look forward to seeing the outcome of the recommendations made in the report.
4Google/Ipsos (September 2011), Australia Mobile Smartphone Consumer Study
5Sallmann, Nick (May 2011), IBISWorld Industry Report J7121: Mobile Telecommunications Carriers in Australia