Mythbuster: A CSP can’t cut service just because a payment is late

A surprising number of people, both service providers and consumers, believe that an overdue payment entitles a CSP to suspend or terminate service.

For consumer and small business contracts, that simply isn’t true.  If there’s nothing more to it, the credit management rules in the Telecommunications Consumer Protection Code preclude a CSP from immediate action.

Not much commentary required on this one … we’ll let the TCP Code speak for itself.

CSP obligations before disconnection

A Supplier must:

(a)    make reasonable attempts to Inform a Customer of a decision to Disconnect the Customer’s Service, at least 7 Days prior to Disconnection;

(b)    in Informing the Customer:

(i)    indicate the earliest date on which the Disconnection could occur; and

(ii)    include the date of issue of the correspondence, if they are Informed in Writing;

(c)    at the Customer’s request, promptly review its decision to Disconnect;

(d)    send a separate Disconnection notice, not just a Bill, in Writing to the Customer prior to Disconnecting the Service, unless the Customer was previously advised in Writing under clause 7.4.7 or 7.4.9(a);

(e)    prior to Disconnecting, make reasonable attempts to Inform the Customer and any Guarantor:

(i)    of all consequences to them of non-payment;

(ii)    that default information may be used for internal purposes;

(iii)    of any process enabling Customers to arrange a repayment plan for outstanding amounts following Disconnection, prior to the Supplier commencing external recovery or legal action;

(iv)    in Writing that:

(A)    their telephone number may no longer be available after Disconnection;

(B)     default information may be disclosed to external parties or a Credit Reporting Agency;

(C)     the debt may be referred to an external collection agent; and

(D)     legal action may be taken to recover the unpaid debt.

Got it ?  Instant disconnection is not a standard option.

CSP obligations before suspending or restricting service

A Supplier:

(a)    may only Suspend or Restrict a Service without Informing the Customer if the Supplier:

(i)    assesses that the Customer or the account status presents an unacceptably high credit risk to the Supplier; or

(ii)    reasonably suspects Fraud or attempted Fraud.

And in case you were wondering:

‘Inform’ means advise:

(a) in Writing; or

(b) verbally and confirm and record to provide an auditable record.

‘Writing’ means a document sent by the Supplier to the last known:

(a)    address; or

(b)    email address or facsimile number the Customer has agreed to use instead

of the Customer or, where relevant, the Guarantor, in the Supplier’s records.

So there’s a lot more to it than (to paraphrase some ‘knowlegable’ Whirlpool user) if you don’t pay on time they’re entitled to cut you off.