New protections for telco customers experiencing hardship

Telcos will be required to do more to support customers who are struggling to pay their bills under new industry rules made by the Australian Communications and Media Authority (ACMA) that come into force on 29 March.

These rules have been developed by the ACMA in response to a direction from the Minister for Communications, the Hon Michelle Rowland MP, to make an enforceable industry standard that will improve safeguards for telco customers experiencing financial difficulties.

The new Telecommunications (Financial Hardship) Industry Standard 2024 requires telcos to establish and promote clearly accessible written financial hardship policies. Telcos must do more to proactively identify customers experiencing financial hardship and prioritise keeping them connected to services.

ACMA Chair Nerida O’Loughlin said the new rules would better support telco customers facing vulnerable circumstances.

“These new rules address a range of identified gaps in financial support for telco consumers,” Ms O’Loughlin said.

“Telcos must do a better job of identifying those in need of payment assistance and provide a stronger range of support options.”

Before disconnecting a customer’s service, telcos will be required to determine whether they are experiencing financial hardship and if so, help keep the customer connected.

The new rules replace and significantly enhance previous financial hardship measures set out in the industry-developed Telecommunications Consumer Protection Code. The new protections include:

  • Broadening the definition of financial hardship to capture a wider set of circumstances which will assist both consumers and telcos in understanding when assistance should be made available
  • Better promotion of financial hardship assistance, including provision of direct information to customers and potential customers who are or may be experiencing difficulties
  • Requirements to offer financial hardship customers a minimum of 6 different options for assistance, including payment plans and the option to extend or defer payment
  • Stronger protections for customers facing credit management action including more stringent requirements before a customer can be disconnected, and an extended disconnection notice period up from 5 to 10 working days.

An ACMA Financial Hardship report released in May 2023 showed that 2.4 million Australian adults experienced financial difficulty or had concerns relating to their telco bill in the previous 12 months. However, industry data showed that as at 30 June 2022 only 4,388 residential customers had financial hardship arrangements in place with their telco.

“Telecommunications services are essential to everyday living and at a time when a lot of Australians are doing it tough, it’s important customers are provided with real support to keep their services connected,” Ms O’Loughlin said.

The ACMA will be actively monitoring compliance with the new rules under its 2023-24 compliance priorities, which include protecting telco customers experiencing financial hardship.

The Standard provides the ACMA with strong immediate enforcement options for telcos found to have breached the rules, such as enforceable undertakings, remedial directions and financial penalties.

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