Consumer groups slam telco sector exemption from new consumer protection regime

Consumer groups are angry that the telecommunications sector has been exempt from the Government’s overhaul of national consumer protection laws and claims consumers and small businesses will lose protections against faulty mobile phones, products and services.

The Government’s proposed consumer reform is currently before Parliament and will see consolidation of consumer protection laws under the umbrella National Consumer Guarantee regime.

But the blanket reform has exempt the telecommunications industry and Nicole Rich, Director of Policy and Campaigns at Consumer Action Law Centre, is one of a number of advocates who are unimpressed.

“The reforms mean that telcos will not have to provide products and services that meet the fundamental basic standards of any industry,” she says.

“At the moment when you purchase telco services and the associated hardware you are protected by implied warranties,” she says.

“These laws mean that consumers will potentially not have the right to have their mobile or internet provided with basic due care and skill or in a way that’s fit for the purposes they bought them for.”

Rich argues that of any industry, telecommunications should be most regulated due to its poor reputation for customer service.

“The telco industry has shown that it’s not capable of providing goods and services to a basic standard and now the Government is showing that consumers will not have protection against this,” she said.

But while the telco sector is no doubt relieved to have been exempt from the new consumer law regime, parts of the building sector are angry they have lost their exemption.

Under the Trade Practices Act, architects and engineers are exempt from consumer protection guarantees, but the new regime will change this.

Industry leaders argue architectural and engineering firms won’t be able to get insurance to cover liabilities if consumers were not satisfied.

However, Rich says that their arguments have no substance.

“There is no reason any industry should be exempt,” she says. “If they are doing their job with due care and skill there is no need for them to have an exemption.”

The changes to the laws are the second instalment in the Government’s national overhaul of consumer protection laws that are aimed at strengthening consumer protection.

The first stage of changes earlier this year aimed to stop unfair contracts and gave more power to the Australian Competition and Consumer Commission.

Jeff Goodall, senior associate at Maddocks Lawyers says the reforms to the laws will also affect the sales practices in the telecommunications industry.

“One impact on the telco industry is the door-to-door and telemarketing side of things. “There will be tighter restrictions of when door-to-door sales can take place and when telemarketing can take place.”