The Australian Communications and Media Authority (ACMA) has found that two telco service providers, Vaya and Live Connected, breached the Telecommunications Consumer Protections Code (TCP Code) by obtaining $20 security deposits from their customers without adhering to the proper guidelines.
Vaya and Live Connected told customers this February that a security deposit would be debited in their next monthly bill. Both companies claimed it was necessary because some customers were using the service but not paying for it.
ACMA then received a number of complaints from customers regarding the security deposits. The TCP Code states that customers are only required to give out security deposits for credit assessments when they plan to buy a telco product.
Neither Vaya nor Live Connected had undertaken any individual credit assessments.
ACMA chairman Chris Chapman said: “This finding sends an important message to the telco industry that security deposits cannot be unilaterally imposed on all customers.”
Security deposits are different from other payments or pre-payments that may be requested of customers by suppliers when they first set up an account.
Vaya and Live Connected have agreed that in future, they will not require a security deposit unless an individual credit assessment has first been undertaken.
The TCP Code provides community safeguards in the areas of sales, service and contracts, billing, credit and debt management, changing suppliers and complaint handling. It also sets out a framework of code compliance and monitoring.
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