CSPs fail simple compliance test

It’s surprising how many service providers trip up on basic compliance requirements.  We surveyed 36 Aussie CSPs against a simple benchmark.  21 of them failed.

The smaller the company, the more likely it was to get the requirement wrong.  But Adam Internet, Crazy John’s and Soul Mobile all got it wrong, too.

The benchmark requirement

We wanted something so simple and clear that it doesn’t take a law degree to get right.  So we chose clauses 5 and 6 of the Telecommunications (Standard Form of Agreement Information) Determination 2003.

Under this Determination, a CSP with a ‘Standard Form of Agreement’ under Part 23 of the Telco Act is required to offer a summary of the contract in a particular format.

Clauses 5 and 6 simply say:

  • The summary must include the heading ‘Important Customer Information: Your Rights and Obligations’ or equivalent.
  • The heading must be in a prominent position.
  • If the heading is not in a colour that’s different from the rest of the summary, it must be bolded and at least two points larger than any other typeface.

Is that so difficult ?  It was for our test selection.

Our method

  • We chose 36 CSPs pretty much at random by googling ‘sfoa summary’.
  • We located the online version of their summary via the Google results.
  • We checked for compliance.

The results

We awarded ‘passes’ only to CSPs that got everything right.  Several others were very close, but after choosing such a simple test we thought it was fair to adopt a strict standard.

  • Some CSPs omitted the required heading completely.
  • Others used the same font size and colour as other headings in the document.
  • One just used body text, and located the heading very ‘non-prominently’.
  • One used larger text, but didn’t bold it.

Full results are set out at the foot of this post.

What’s going on here ?

We doubt that ACMA will be keelhauling the CSPs over this issue.  But we’re mystified as to why such a simple, clear regulatory requirement trips up so many players.

Maybe there’s just too much regulation for CSPs to cope with.

Full results

Internode Pass  
1800 Reverse Fail Heading is in same colour and font size as other headings
GRLmobile Fail Heading is in body text, in body text size and colour
Bendigo Community Telco Pass  
iiNet Fail Heading is in same size and bolded like other headings
PacNet Pass  
Highway1 Fail Heading completely missing
1800PhoneHome Fail Heading completely missing
Nextgen Pure Data Pass  
Adam Internet Fail Heading same size and colour as title heading
Crazy John’s Fail Part of heading is in same size and bolded like other headings
Soul Prepaid Mobile GSM Fail Doesn’t contain all words / Heading is in same size and bolded like other headings
Hunter & Coast Community Telco Pass  
Living Networks Fail Heading is in same size as other headings / not bolded / same colour as body text
ACC Fail Heading in same colour but not bolded
Telarus Fail Heading in same colour but not bolded
PowerTel Pass  
WebSecure Fail Heading completely missing
Commander Pass  
EFTel Fail Heading completely missing
Austar Fail Heading completely missing
AAPT Fail Heading completely missing
Engin Pass  
Netspeed Fail Heading completely missing
Trinity Telecom Fail Heading completely missing
Brennan IT Pass  
Ansego Fail Standard, non-bolded body text
TransACT Fail Heading completely missing
Demand Broadband Fail Heading completely missing
Spirit Telecom Pass  
Multelink Pass  
People Telecom Pass  
iRoam Fail Heading same font size and colour as other headings
Simplus Pass  
NewTel Pass  

About Peter Moon

Peter Moon is a commercial lawyer with 20 years experience in the tech and telco industries.
This entry was posted in How not to do it, Telecommunications Act and tagged , , , . Bookmark the permalink.

2 Responses to CSPs fail simple compliance test

  1. Peter

    I think your methodology is fundamentally flawed. The language of the determination says the summary must include a heading with suggested wording or something substantially the same. It does NOT require that heading to be the FIRST heading.

    So in the case of my former employer AAPT* the heading “Your Rights and Obligations” does appear in larger bold font, but after some highly relevant material that explains that the SFOA applies to a whole host of “offerings”. Your conclusion that the heading is missing is therefore wrong.

    The words “Important Customer Information” are missing, but there is a real question of whether a court would infer that the absence of these words would make the statement substantially not the same. It would be perfectly reasonable to argue that the remainder of the words mean this is important customer information, and so this stem is superfluous. Given the way the Court has determined that “free” can be used in advertising mobiles (the customers undertand it is not free, just that there is no upfront payment) I think a regulator would have a hard time winning the case.

    It is also particularly unfair to sample based on the providers whose SFOA summaries you did find with your simple Googling. One could argue that all the OTHER providers are greater transgressors because their SFOA summaries wre not so easy to find! That includes a couple of small telcos called Telstra and Optus.

    *I should note that the SFOA was never part of my responsibility at AAPT, it being a legal matter and all.

  2. Peter Moon says:

    Thanks for the feedback, David.

    The words ‘Important Customer Information’ are material. Materiality must always be assessed in context. The Determination requires a heading that informs customers that (a) this is important information for them and (b) it concerns their rights and obligations. A CSP cannot entirely omit half the required elements and claim substantial compliance.

    The Determination wants a big, bold heading to state these things. Not body text. That’s the entire point of the requirement.

    Second, your understanding of ACCC’s attitude to the word ‘free’ is quite wrong. Just three days ago, ACCC Chairman, Mr Graeme Samuel said “Special offers of discounted or ‘free’ goods can be very effective in advertising, however the advertised price savings must be real and not illusory.” If you check out Crazy John’s advertising since it was pinged for using the word ‘free’, you’ll find it has dropped it in favour of ‘$0 up front’.

    Third, we stated our results and how they were obtained. They are what they are. BTW, there’s nothing particulary wrong with a provider’s SFoA Summary being un-googlable (if that’s a word). The Determination provides for who must receive the document, and when.

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