Telstra breaches credit management rules for financial hardship customers

The Australian Communications and Media Authority (ACMA) has directed Telstra to comply with financial hardship rules after it found that the carrier took credit management action against 70 customers who were on a financial hardship arrangement with Telstra.

Under the Telecommunications Consumer Protections (TCP) Code, telcos must suspend credit management action, such as service suspensions, disconnections or debt collection, while a financial hardship arrangement is being discussed or is in place, the ACMA stated.

Of the 70 customers impacted between August 2019 and April 2022, 22 had services restricted, four had services suspended, five were disconnected and two were referred to outside collection agencies. Other actions included letters or calls requesting payment.

The errors occurred due to issues between two Telstra legacy IT systems that prevented or delayed a status update of the customers involved, according to the ACMA. For 61 of the customers the issue was resolved within 24 hours.

This investigation follows multiple recent ACMA enforcement actions against Telstra for a range of issues due to problems with legacy IT systems.

“Telstra must continue to address these longstanding issues as a matter of urgency so that its systems can deliver on customer safeguards,” said acting ACMA Chair Creina Chapman.

She warned that “Protecting telco customers experiencing financial hardship is an ACMA compliance priority and all telcos can expect greater scrutiny of their dealings in these matters.”

The ACMA has formally directed Telstra to comply with the TCP Code.

Penalties for failing to comply with the ACMA direction can be as high as $250,000.

Financial hardship arrangements are used to support people experiencing financial difficulties, stated Chapman.

“With the pressures caused by rising costs of living and the COVID-19 pandemic, it’s more important than ever for telcos to support their customers, particularly those in difficult circumstances,” Chapman stated.

“Telco services like phone and internet are now essential to daily life, used for everything from work and education, through to health and government services, so even briefly suspending or disconnecting customers can cause a real disruption to their lives.”