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FCA responds to TIO report – How many more wake up calls does the industry need?

What will it take before the telecommunications industry accepts that there are systemic problems with the way they sell and market their products?

There is yet another example today, with the release by the Telecommunications Industry Ombudsman (TIO) of its latest systemic issues report. The report documents poor sales practices, hidden costs and unclear information.

These findings reinforce those in FCA’s survey of financial counsellors, released just last month (April 2021). Financial counsellors said that:

  • Overall, telco hardship practices are poor
  • Mis-selling is common throughout the industry, with around 80% of the financial counsellors who responded to the survey saying they have clients with debts where mis-selling has occurred
  • Affordability checks are inadequate, which places people under financial stress

Financial Counselling Australia’s CEO, Fiona Guthrie, said that it is very clear that the telecommunications industry drives demand for financial counselling.

The telecommunications industry has been supportive in principle of an industry funding model for financial counselling but has called for more data.

Here is yet another piece.

“Financial counsellors are at the frontline, helping people who are struggling financially. We’ve been telling the telco industry about some of their poor practices for a long time. It’s time for them to fix the problems”, said Ms Guthrie.

The TIO report also follows last week’s Federal Court decision, which saw Telstra fined $50 million plus costs for unconscionable conduct involving mis-selling to Aboriginal and Torres Strait Islander people in remote communities.

Financial counsellors assist people experiencing financial difficulty. They provide information and advice to help people tackle their financial problems and to minimise the risk of issues occurring in the future. Financial counselling services are free, confidential and independent.

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