With tougher times upon us, credit management and credit obligations should be at the forefront of every telco and ISP’s mind. So does a telco or ISP have to undertake a customer credit assessment ?
Hint - the Telecommunications Consumer Protections Code (C628:2007) (‘TCP Code’) has the answer.
Clause 7.1 of the TCP Code says:
7.1.1 Credit Assessment rule: If a Customer applies to a Supplier for the supply of a Service, the Supplier must:
(a) undertake an appropriate Credit Assessment to determine whether to supply a Service to that Customer; or
(b) supply a Service which includes measures to effectively limit the Customer’s expenditure or usage by:
(i) a Hard Cap;
(ii) a Pre-paid Service;
(iii) the barring of international and premium service calls;
(iv) reducing broadband internet download speed on reaching a limit; or
(v) any other equivalent measure.
7.1.2 Credit Assessment process: Where a Supplier undertakes a Credit Assessment, the Supplier must Inform the Customer, at the time of the Credit Assessment, of its general nature and effect.
Answer
Yes – but telcos and ISPs can do one of the following (to comply with the TCP Code):
(a) undertake an appropriate Credit Assessment to determine whether to supply a service to a customer; or
(b) provide a customer with a service to effectively limit expenditure or usage by any of the means specified in clause 7.1.1(b);
and where a credit assessment is done, don’t forget to let the customer know, it’s a requirement of clause 7.1.2.
From a practical point of view most telcos and ISPs don’t go to the trouble and expense of credit assessments for individuals or low value services.
Our suggestion, if option (b) is chosen, is to send the customer a welcome email or letter (like some telcos and ISPs do) pointing out the ‘features’ of the services, particularly if those measures include online usage information (if they do, provide a hyperlink and clear login details) or automated email reminders of data usage volumes, for example. At the risk of stating the bleeding obvious (yes, telcos and ISPs still forget this !) keep a copy on the customer account. This may become critical where the TIO is investigating a complaint, particularly with reference to its position statement ‘unlimited credit – financial over commitment’.
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Actually a lot actually do number 1. The code was intentionally written not to require an individual assessment because technically that would require asking for statements of income and expenditure.
Capped plans (like internet caps not mobile caps) and a requirement to make the first monthly payment before service provision can constitute an “appropriate credit assessment.”