Regulation push as telco complaints soar

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Complaints against the telecommunications industry have more than trebled in the last three years and an increasing number of them have been made about non-members, giving rise to calls for the scheme to be made compulsory.

Figures from the Telecommunication Dispute Resolution Scheme show customers logged 1833 complaints during 2010, with billings, customer service and faults among the biggest sources of frustration.

More than half of all complaints assessed related to billing and customer service, although only 135 complaints were officially registered by the scheme last year, which has introduced a more rigorous system for testing of complaints.

Scheme spokesperson David Russell said the scheme only registers complaints where it is clear the complainants have used their provider's internal complaints process first.

Previously, complaints were sometimes elevated "beyond the degree they deserved"...

During 2010 320 complaints were made about companies which were not members of the scheme.

Internet service provider and phone company Slingshot was one of the companies that attracted complaints, but left the scheme in 2009.

The Telecommunication Dispute Resolution Scheme was set up in 2007 and was intended to be a last resort for frustrated customers who wanted independent arbitration.

Members include Telecom, Vodafone and TelstraClear, as well as a host of other providers.

The scheme represented about 98 per cent of the market when it began, but this figure has since dropped to about 90 per cent with the withdrawal of CallPlus/Slingshot, Orcon and WorldxChange.

Russell said the number of complaints about non-members was a concern for consumers, who had nowhere to turn if their provider was not part of the scheme.

A similar scheme in Australia is compulsory for phone and internet companies and indications are that regulation could soon be coming to New Zealand.

"If the industry can't provide the protection that the scheme should be providing then I believe in this day and age it's (regulation) incumbent."

"If the Government steps in and regulates, they (non-members) could be in for a rude surprise. It would be a cost that would not only be on those that are reluctant to be part of the scheme, but it could be an impost on those who are already in the scheme."

Russell estimates a regulated scheme could cost the industry as much as four times the price of the current scheme, without taxpayer support.

Of the complaints assessed by the scheme during 2010, 34 per cent related to billing, 22 per cent to customer service, 16 per cent to faults, and 10 per cent were complaints about network performance.

Just a handful of complaints were received about complaints handling, credit management and transfer.