85% of Critical Information Summaries breach ACL

CIS ACL complianceWe posted earlier that we’d seen some early “Critical Information Summaries” that omitted any statement of the total minimum plan cost.  So we decided to survey via a Google search.  The results strongly indicate that telcos don’t understand that they must simultaneously comply with the TCP Code and the Australian Consumer Law.

85% of the CIS’s we sampled were in breach of section 48 of the Australian Consumer Law.  And we’re pleased to say that the only telco that complied with that law was a Cooper Mills client.

How we tested

We googled the exact phrase “critical information summary” (which makes sense, since that is the compulsory title of the document) and downloaded a CIS from the first ten telcos that offered one.  Where it was obvious that two brands were in fact the same business, we only took one. By the time we had reached ten separate CIS’s we were onto the thirteenth page of search results, so it’s fairly likely our sample represents every Aussie Australian telco that currently offers a CIS.  (It’s not compulsory until 1 March 2013, so these companies are to be applauded as early adopters.)

We discarded three where the plan on offer was month to month.  They aren’t useful for this exercise because, with those kinds of plan, stating the monthly cost is also stating the total cost, so ‘compliance’ can happen accidentally.

The outcome

That left seven plans with 12 or 24 month minimum terms, all of which are required by the ACL to prominently display the total plan cost.  Only one of them did.  That’s an 85% fail rate.

For ACCC, section 48 breaches are a big deal

The Australian Competition and Consumer Commission seems to have a zero tolerance policy when it comes to breaches of section 48.  It’s important that telcos quickly catch on to the fact that while the TCP Code lists certain info that must appear in a CIS, the resulting document is still subject to the Australian Consumer Law, and must also state the total price where the ACL requires it.

What does this result tell us?

The good news is that some telcos have stepped out bravely and adopted the CIS well before it is compulsory.

The bad news is that almost all of them have a one dimensional understanding of telco regulatory compliance.  They have seen the TCP Code, and seen that one part of it requires a CIS with certain content, and that is what they have delivered.  The interaction of the document with the ACL has been completely lost on them.  Ironically, in attempting to comply early with one law, they have broken another.

We (almost) hate to say ‘we told you so’

The sole telco that didn’t breach section 48 is a Cooper Mills client, who paid just $31.90 for the vital information that saved the day.  Our one page guide to the TCP Code CIS rules told them what the other telcos didn’t realise.

CIS Compliance Guide

Get the Guide from the Compliance Store

TCP Code CIS Guide
TCP Code CIS Guide
From 1 March 2013, every telco Offer must have a Critical Information Summary. Here are all the rules, on a single page, in a handy diagram. Don't wade through the Code trying to figure out the CIS rules. Absorb them in a couple of minutes with this visual guide. (GST will be added at the checkout.)

About Peter Moon

A telco lawyer with a truckload of experience
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