Small Business and Telco Deception
The Telecommunications Industry Ombudsman in Australia received over 200,000 complaints in 2008/09 (TIO: 2009 Annual Report). These complaints include over 53,000 contractual disputes, a 77% rise on the previous year. The Ombudsman further highlights that complainants ‘were not provided enough information or advice at the point of sale about the service or the terms and conditions for the service’, 45% of all contractual complaints were of this category (TIO: 2009 Annual Report).
Some small businesses think that they are particular targets for complex contracts. (SMH). The Trade Practices Act allows for companies to take action seeking damages in Federal Courts, but the time-consuming and costly nature of these proceedings mean this is not a realistic option for many small business people (ACCC) who already feel overwhelmed by the compliance burden placed on them by governments. (COSBOA)
Trust is crucial for transactions, there are many ways that a person or organisation can mislead or deceive another. Contracts preserve trust by providing both parties with the chance to agree to a transaction in all relevant detail. But contracts, whilst strictly truthful, nevertheless can be used to mislead and deceive: hiding details in the fine print is one way, hiding unsavoury truths in pages and pages of otherwise useless detail is another, financial liabilities can be hidden in complexity too. The Telecommunications Industry Ombudsman lists a number of ongoing problem areas in the FAQ section of the website (TIO: FAQ).
Although many of the links no longer seem to work, the TIO does offer specific guidance on the terms “capped, unlimited and free”. Unsurprisingly the TIO thinks those terms should mean what they imply (TIO: Use of Marketing Terms). The list of those the ACCC accuses of misleading behaviour is extensive and the legal process against them is over a year old. (ACCC). The difficulty experienced by the ACCC in prosecuting its case highlights the importance of the role the ombudsman can play in fostering an environment conducive to ethical conduct.
While the TIO documents a large quantity of complaints, it is very difficult to gather what action it has taken on them and what determinations were made. Information about determinations is scarce. In fact only two determinations have been published for 2009 (TIO: Publications). The lack of any meaningful threat of sanction, either monetary or by naming and shaming unethical companies undermines the ombudsman’s ability to foster an environment conducive to ethical conduct. Fortunately the TIO enjoys a close working relationship with the industry and government, ‘The TIO assists Communications Alliance in developing codes by providing information and other feedback on complaints received by the TIO’ (TIO). This relationship offers the opportunity for the TIO to promote greater ethical conduct throughout the telecommunications industry and reduce the number of complaints due to misleading or deceptive conduct.
Importantly this path provides all stakeholders within the industry the opportunity to avoid further examples of tighter restrictions as experienced in 2009.
“Complaints about mobile premium services increased slightly over the previous year (from 13 899 to 15 653). Complaints about these services declined significantly in the last quarter of 2009, which may reflect an early acknowledgement by providers of the tighter restrictions imposed by the Australian Communications and Media Authority from 1 July 2009.’ (TIO: 2009 Anuual Report).
In short, a widespread growth of complaints occurred except where more stringent regulation was put in place. Does this imply that the only possible way to promote ethical conduct and reduce complaints is by law? This outcome seems to be in spite of sophisticated mechanisms such as the TIO, Communications Alliance and the Australian Communications and Media Authority which exist to support greater ethical responsibility within the telecommunications industry.
