On 6 February 2024, the Australian Communications and Media Authority (ACMA) introduced a new industry standard, the Telecommunications (Financial Hardship) Industry Standard 2024 (the Standard).
The Standard sets out new obligations and rules for telecommunications providers with respect to customers who are experiencing financial hardship (Financial Hardship Customers), replacing those currently in the industry code, C628:2019 Telecommunications Consumer Protections Code (the Code).
From 29 March 2024, telecommunications providers will have to ensure that their policies and practices are compliant with the Standard.
Who does the Standard apply to?
The Standard applies to carriage service providers that supply telecommunications goods or telecommunications services to residential, small business and not-for-profit customers under a consumer contract (CSP).
A telecommunications service refers to:
- a listed carriage service or any service supplier in connection with that service; and
- a content service provided in connection with the supply of a listed carriage service (excluding subscription broadcasting services and subscription narrowcasting services).
What is ‘Financial Hardship’?
‘Financial hardship’ means where a customer is unable to make payments owing to the CSP (under their consumer contract, or otherwise) because of:
- personal/household illness;
- unemployment;
- low/insufficient income (including reduced access to income);
- domestic/family violence
- death in the family;
- change in personal or family circumstances;
- natural disaster;
- unexpected/unforeseen changes impacting the customer’s income or expenditure; or
- any other reasonable causes
and the customer considers they would be able to pay the CSP under an agreed Financial Hardship Assistance arrangement.
What are the new rules and obligations?
If you are CSP for the purposes of the Standard, you will need to:
- update your Financial Hardship Policy (now called Payment Assistance Policy under the Standard) and summary;
- update your Credit Management Action Policy;
- update any application form for financial hardship assistance;
- update your billing documentation and other communications sent to customers;
- review and make changes to your processes and systems in identifying Financial Hardship Customers, communicating with Financial Hardship Customers, assessing a customer’s eligibility for Financial Hardship Assistance, providing Financial Hardship Assistance;
- train your staff; and
- update your record-keeping practices.
Payment Assistance Policy
Previously called the ‘Financial Hardship Policy’ under the Code, CSPs must establish and maintain a Payment Assistance Policy. Rules surrounding the content, accessibility and promotion of the Payment Assistance Policy and associated summary and application form is more stringent under the Standard.
Under the Standard, a CSP must offer the below assistance measures:
- temporarily postponing, extending or deferring the time for paying a bill;
- payment plans which are tailored to meet a customer’s ability to pay; and
at least another 4 of the below options:
- discounting a bill charge;
- applying a credit to the customer’s account;
- waiving a debt;
- establishing an arrangement whereby the provider matches payments made by the customer or gives credit in exchange for payments made by the customer;
- controls on how a customer can incur charges with the provider, including spend controls;
- restrictions;
- removing non-essential features of a telecommunications product at no cost;
- transferring the customer to a different telecommunications product that better suits their circumstances;
- adjusting internal threshold limits so that the customer is not disconnected; or
- offering a free non-automatic payment method.
CSPs must also proactively identify and reach out to customers who may be experiencing financial hardship such as if they have more than 2 consecutive bills overdue, a total of 3 overdue bills in the previous 6-month period, or have arrears of more than $200.
TIO’s powers
Under the Standard, the TIO has the functions and powers of receiving, investigating, facilitating the resolution of, making determinations in relation to, giving directions in relation to, and reporting on complaints about matters relating to this Standard.
Transition Arrangements
Applications made before the commencement of the Standard (29 March 2024) that has not been finally dealt with before this date must be dealt with as an Application made under the Standard and new Policy, from 29 March 2024.
Complaints made to a CSP, TIO or ACMA prior to 29 March 2024 alleging the CSP has not complied with the Code in relation to a provision relating to financial hardship that has not been finally dealt with by 29 March 2024, will be treated as a complaint in respect of the Code while that provision of the Code is still in force.
If a CSP has entered into an Arrangement with a Financial Hardship Customer before the 29 March 2024 and the Arrangement is still on foot immediately before the 29 March 2024, the CSP must within 20 business days of 29 March 2024, reviewing the Arrangement against the new Policy established by the CSP, and if the Arrangement does not comply with the Policy, make an offer to the Financial Hardship Customer with a new arrangement for Financial Hardship Assistance that is consistent with the new Policy and Standard (New Arrangement).
If you require any assistance or have any questions regarding your compliance with the Standard, please contact us.
