Telstra has breached credit management rules after issues with its its legacy IT systems resulted in the telco taking action against 70 customers who were on a financial hardship arrangement.
The Telecommunications Consumer Protections (TCP) code dictates that telcos need to suspect credit management action – including service suspensions, disconnections and debt collection – while a financial hardship arrangements are being discussed or is in place.
However, from August 2019 to April 2022, 22 customers had their services restricted, four had services suspended, five were disconnected and two were referred to outside debt collection agencies. Other actions taken included letters and calls requesting payment.
As a result, the Australian Communications and Media Authority (ACMA) directed Telstra to comply with rules after it found that issues between two Telstra legacy IT systems prevented or delayed status updates of affected customers.
“With the pressures caused by rising costs of living and the COVID-19 pandemic, it’s more important than ever for telcos to support their customers, particularly those in difficult circumstances,” acting ACMA Chair Creina Chapman said.
“Telco services like phone and internet are now essential to daily life, used for everything from work and education through to health and government services, so even briefly suspending or disconnecting customers can cause a real disruption to their lives.”
Out of the 70 customers, 61 had their issues resolved within 24 hours.
ACMA added that further non-compliance could result in penalties up to $250,000.
This isn’t the first time Telstra’s legacy systems have gotten it in trouble with ACMA, with the telco self-reporting an issue that saw it delay repaying more than $11 million to 67,000 customers.
“Telstra must continue to address these longstanding issues as a matter of urgency so that its systems can deliver on customer safeguards,” Chapman said.
“Protecting telco customers experiencing financial hardship is an ACMA compliance priority and all telcos can expect greater scrutiny of their dealings in these matters.”