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Telco debt collection practices worry TIO

Telco debt collection practices worry TIO

Number of complaints to the TIO about aggressive methods of debt collectors working for telcos have risen significantly

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Debt collectors working for telcos are becoming a growing concern with complaints of their aggressive behaviour towards customers soaring in recent years, according to the Telecommunications Industry Ombudsman (TIO).

The TIO is an independent outlet which deals with escalated complaints of telco customers.

Telecommunication service providers are responsible for the debt collection conduct of internal debt collection staff or third-party collectors. This includes debt buyers.

Between 2010 and 2011, new complaints against debt collectors knowingly pursuing payments that are in dispute and in the hands of the TIO hit 5430. This is 2.2 per cent jumped from the previous corresponding period though between 2009 and 2010 that figure was a staggering 33.3 per cent.

There were also 494 recorded complaints about debt collectors using “harsh, harassing or otherwise offensive methods to recover payment of a telecommunications debt” in 2010 to 2011, a jump of 42.8 per cent.

Customers being hounded by debt collectors risk a credit default which can inhibit a person’s ability to apply for future credit and impact the process of applying for personal loans, mobile phone contracts and so on.

Credit management ties in with the whole issue, particularly with new mobile phone services. In October to December 2011 there were 9252 complaints in that area and while it is a 6.5 per cent decrease from the last quarter, it was 63.8 per cent higher than the previous corresponding year.

Most credit management complaints revolve around financial over commitment, possibly after experiencing “bill shock” and many customers have said they do not have the right tools to manage their mobile phone spending.

To that end, the telcos have not sat idly by. Vodafone has introduced a new application for smartphone users to check spending easily while Optus has brought in real-time over-spending alerts to international data roaming customers.

“The issue of credit management continues to be a concern to the TIO and we have express the need for stronger and more comprehension rules in the Telecommunications Consumer Protections (TCP) code currently under review,” Ombudsman, Simon Cohen, said in a statement.

The TCP code was recently revised by the Communications Alliance in a bid to simplify telco-related advertising and give customers a way to prevent “bill shock”.

Telco consumer advocacy group, ACCAN, has rejected the revised TCP, claiming it was still inadequate.

The TIO also recorded record complaints by small businesses against their telco providers. Click here to read more.


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