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 |
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.
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.