046/05
4 May 2005

New safeguards for telecommunications consumer contracts

The Minister for Communications, Information Technology and the Arts, Senator Helen Coonan today welcomed the registration of the new consumer contracts industry code of practice by the Australian Communications Authority (ACA).

“The consumer contracts code will provide an important safeguard against unduly complicated and unfair contracts in the telecommunications sector. It will complement a range of legislative provisions, both state and federal, dealing with contractual fairness across all sectors,” Senator Coonan said.

“Registration of this code is an important milestone in the Australian Government’s self-regulatory regime for telecommunications. It also represents the culmination of an extremely intensive process, involving a high level of collaboration and co-operation between industry and consumer stakeholders.

“Registration of this code is particularly satisfying as the Government took whatever actions it could to expedite the code process, for example through writing to the CEOs of the major carriers.”

The code is among the first of its type internationally, in setting out rules to apply to a particular industry sector about the fairness of individual contract terms and the length and complexity of contracts.

Under the code, any consumer or small business contract for telecommunications services entered into after the registration of the code must be made to comply with the code rules within six months. Existing contracts for fixed line services must also comply within six months.

If a consumer or small business has a mobile or Internet service without a fixed contract period, the provider must offer a new contract that complies with the code.

Registration of the code means that service providers may now be directed by the ACA to comply with the code rules. Failure to comply with such a direction may attract a substantial penalty. Before registering a code, the ACA must be satisfied that a number of pre-conditions have been met.

For important consumer codes such as this, the ACA must be satisfied that the code provides appropriate community safeguards. The ACA must also confirm that consultation was adequate and that consideration was given to the views of the Australian Competition and Consumer Commission, the Telecommunications Industry Ombudsman, the Privacy Commissioner, industry stakeholders, consumers and members of the general public.

“The Government will continue to monitor industry developments and respond where necessary to facilitate industry outcomes in the best interests of consumers,” Senator Coonan said.

The code is available from the Australian Communications Industry Forum website at www.acif.org.au/publications/codes and on the ACA website at www.aca.gov.au.