Aussie telcos will soon need to boost their efforts for customers struggling to pay their phone and internet bills, as a new industry standard from the Australian Communications and Media Authority (ACMA) introduces updated rules for those in need.
Under direction from the Albanese government, telco regulator ACMA has been tasked with making it mandatory for telecommunications providers to provide financial hardship assistance to “all customers experiencing difficulties paying their bills” and prioritise keeping customers connected to their service.
To that effect, ACMA has developed the Telecommunications (Financial Hardship) Industry Standard 2024 – introducing new rules which demand telcos not only establish and promote “clearly accessible” written hardship policies, but also “do more” to proactively identify customers experiencing financial hardship.
The new rules are set to replace and “significantly enhance” the current rules on financial hardship which are laid out in the long-running Telecommunications Consumer Protections Code.
In addition to setting out better promotion of financial hardship assistance, the new protections will also broaden the definition of financial hardship to capture a wider set of circumstances, and require telcos to offer financial hardship customers a minimum of 6 different options for assistance, including payments plans, discounts, debt-waiving and the option to extend or defer payment.
The new standard also dictates providers must “take all reasonable steps necessary” to identify financial hardship customers for the purpose of advising options for assistance as “early as possible”.
Providers will not only need to give advice and information about their payment assistance policy to eligible customers, but will further need to make available options for assistance which are “realistic, appropriate, and tailored to suit the needs of the customer”.
Furthermore, the standard dictates customers must not be charged by a provider to apply for financial hardship assistance.
ACMA Chair Nerida O’Loughlin suggested the new rules will be a boon to customers facing “vulnerable circumstances” and called for telcos to up their efforts for those in need.
“These new rules address a range of identified gaps in financial support for telco consumers,” said O’Loughlin .
“Telcos must do a better job of identifying those in need of payment assistance and provide a stronger range of support options.”
Consumers facing credit management action will also see stronger protections, such as more stringent requirements before they can be disconnected, and an extended disconnection notice period of 10 working days, up from the previous five.
A big gap to close
The new industry rules arrive after an ACMA report released in May 2023 revealed a chasmic gap between Australians experiencing financial difficulty and those receiving assistance from their telco.
The Financial hardship in the telco sector: Keeping the customer connected report showed some 2.4 million Australian adults either experienced financial difficulty or had concerns relating to their telco bill in the previous 12 months – however, this was coupled with industry data which showed as of 30 June 2022, only 4,388 residential customers had financial hardship arrangements in place with their telco.
Furthermore, the report noted telco payment difficulty was most common for 18 to 34-year-olds – as well as those reliant on government payments and those with disability – and that the most common underlying factor for bill payment difficulty was increases in cost of living.
Minister for Communications Michelle Rowland, who provided the directions for ACMA to establish its new industry standard, said the updated rules were an essential step for the industry moving into this year.
"In 2024, staying connected is an essential part of everyday life,” said Rowland.
“It's how Australians keep in touch with loved ones, run businesses, and engage with government.
“That’s why it is critical telcos do all they can to keep customers connected when they are experiencing difficulties paying their bills.”
The new industry rules come into effect on 29 March 2024.
