Last updated 9 August 2016

Consumers who enter contracts for the provision of telephone and internet services are protected by the Australian Consumer Law (ACL) and the Telecommunications Consumer Protection Code. Some consumer protections contained in the ACL do not apply to telecommunications and utility providers.

Whenever consumers receive telephone or internet services, they have entered a contract with the service provider for the provision of that service. These contracts are often entered into over the phone.

All telephone and internet service providers are required under legislation to be members of the Telecommunications Industry Ombudsman (TIO) (pt 6 Telecommunications (Consumer Protection and Service Standards) Act 1999 (Cth)). The TIO provides a free, alternative, external and independent process for resolving disputes about telecommunication services. Before accessing the TIO, consumers must first try to resolve the matter with their telecommunications provider unless the matter is urgent. Once the phone or internet company has taken legal action, the TIO is unable to investigate. Complaints to the TIO can be in writing or made over the phone. The TIO has the authority to make binding decisions (up to $50 000) that bind the telecommunications provider but not the consumer. The TIO can also make recommendations (up to the value of $100 000, but the decision is not binding on the telecommunications provider). The decision may require the telecommunications provider to pay money or take some other remedial action.

The TIO makes decisions based on the law, good industry practice and what is fair and reasonable in the circumstances of the particular complaint. The TIO cannot make decisions about all telecommunications complaints (e.g. whether the cost imposed for a particular service is fair, the content on smartphones or the availability of ADSL).

The consumer is free to access the court system if they are dissatisfied with a TIO decision or recommendation.

Mobile phone services

Consumers have the option of purchasing their mobile phones outright or entering into a contract to pay for the mobile phone.

Prepaid mobile phones

If the consumer pays for the mobile phone outright, they have the option of entering a contract with a particular service provider to give services, which they are billed for in arrears, similar to the arrangement for a home phone or fixed line service. Consumers can also have a prepaid service that allows the consumer to control their level of debt as no credit is extended by the telecommunications provider.

If consumers pay for the phone outright and then enter a contract with another telecommunications provider for phone services, they cannot complain to the TIO if they have a problem with the mobile handset.

Mobile phone contracts

If the consumer does not pay for the mobile phone up front, they will enter a contract to pay for the phone and services over an extended period. This option usually includes an obligation for the consumer to stay with a particular provider for a set period of time.

A consumer can enter a written or oral contract. If the consumer signs a contract, the document signed will only contain the most relevant terms of the contract. A copy of the complete terms and conditions of the contract can usually be found on the telecommunications provider’s website.

There is no such thing as a free phone. When entering a payment plan or a fixed-term contract, the consumer is unable to cancel without paying a cancellation fee. The cancellation fee can be substantial.

The consumer is responsible to the telecommunications provider for the calls made on the mobile, even where the consumer and a third party (e.g. girlfriend, boyfriend or flat mate) agreed that the third party would be liable for the calls made.

Standard mobile phone contracts do not have guarantees or referees. Consumers signing mobile phone contracts believing that they are guarantors or referees find themselves noted as the owner of the phone and liable not only for the contract amount but any calls made on the account. Consumers who entered contracts believing that they were guarantors or referees can take legal action or complain to the TIO, however, it can be difficult to show that the belief was legitimately held given that the contract clearly states that they are responsible.

Pay TV and other content subscription services

Complaints about the content of Pay TV or other subscription services fall outside the jurisdiction of the TIO. However, if the subscription services are provided by the telecommunications provider, billing complaints may be considered by the TIO (e.g. disputed charges relating to Premium MMS or SMS).

Complaints about the content of subscription services including Pay TV and information provided on smart phones can be made to the Australian Communications and Media Authority (ACMA). In most cases, complainants should first raise the issue with the provider of the services and, if the issue is not adequately resolved, refer the matter to the ACMA.