Telco complaints scheme under fire from Consumer NZ, Tuanz

The award-wining Telecommunications Disputes Resolution Scheme, which has shed several members since it began over two years ago, is under fire from consumer groups.

TUANZ and Consumer NZ wrote to ICT Minister Steven Joyce last week asking him to make membership to the scheme mandatory.

The letter appears to have been prompted in part by a reporter’s experience in dealing with the ISP Slingshot. “TUANZ has fielded many calls from disgruntled users who have nowhere to turn when faced with a telecommunications dispute simply because their provider does not subscribe to the current scheme. A recent Herald on Sunday consumer article from David Fisher, highlighting his personal experience with Slingshot, has overwhelmed the paper’s mailbag.”

When contacted by Computerworld this week business development manager Katherine Hall, who cosigned the letter and who sits on the TCF board as part of TUANZ's role as consumer representative, says the users association receives on average two to five calls a week from disgruntled telco customers.

Slingshot opted out of the scheme last year, claiming dissatisfaction with the process of handling complaints. Earlier this year during the XT Network outages Slingshot advertised that Telecom mobile customers could switch to its fledgling MVNO offering, and if they were unhappy with the XT service to contact the TDRS.

What is the TDRS?

The TDRS was set up by the Telecommunications Carriers Forum. It is overseen by a council that includes both consumer and industry representatives and is chaired by former Consumer NZ chief executive David Russell.

Since it began in November 2007 ISP membership has shrunk from 16 to ten. However, among those who have stuck with the scheme are tier one carriers Telecom, TelstraClear and Vodafone. Customers are required to first make a complaint to their service provider, and only if it is not satisfactorily resolved can they take it to the TDRS if their provider is a member.

In May this year the TDRS won a Vero Excellence Award in Business Support Award, and in June it released a comprehensive review of its service, where the exodus of six members was noted.

Cheap scheme for telcos

In its letter to the Minister, TUANZ and Consumer NZ claim that while the processes for handling complaints is being resolved among industry players, funding has not been agreed to. “TUANZ and Consumer NZ are not confident that the issue of funding for the scheme is anywhere near resolution. Despite the best efforts of the TCF to lead its members to an agreed funding structure, consultation continues and no firm agreement has yet been reached.”

Hall says the scheme costs the telco industry $750,000 a year – which she says is cost effective when compared to other industry dispute schemes that are as high as $5 million.

David Russell says the telcos are getting a “bargain basement rate”. “At $750,000 the TDRS is by far the cheapest and if the government steps in and regulates the scheme, you can expect that figure to go up substantially by a factor of two at least, possibly four,” he told Computerworld.

“Unfortunately, there are elements of the industry that can’t see the wisdom of being in control of their own destiny.”

Computerworld asked if he was referring to Slingshot. “They rode on the back of the TDRS when they weren’t members themselves which was incredibly cheeky and showed what I can only term an immaturity,” he says, referring to the ISP’s campaign during the XT outage.

“It’s not a game, it’s a matter of providing an efficient and effective dispute resolution service for the consumers of telecommunications in New Zealand. If Slingshot and the rest of them can’t sort it out for themselves they will have the headmaster imposed upon them.”

When asked if mandatory membership was the same as regulation, Russell replied “there’s no half pregnancy here.”

He believes regulation is easy to achieve. “With very little delay, if the Minister wishes he can put in place regulation for dispute resolution of the telecommunications industry.”

Regulation looms

Computerworld asked Minister Joyce whether he had responded to TUANZ/Consumer NZ letter and if their call for mandatory membership was effectively a call for regulation.

His office emailed the following statement: “Earlier this year I wrote to David Stone, Chief Executive of the Telecommunications Carriers Forum, indicating that I was prepared to continue with an industry led scheme provided that all carriers are members of the TDRS. I understand that carriers are currently working towards a solution which will provide for universal membership and expect the matter to be settled shortly. I advised them at the time that if they are not able to do this I will be considering a range other options.”

Yesterday Stone met with the Minister and discussed the TDRS. When contacted by Computerworld he appeared to accept that regulation may be inevitable.

“The Minister’s made it clear he wants wide membership and it is hard to herd cats. Regulation may be the only way to achieve that at the end of the day,” he says. “We’re working towards doing it on a basis it isn’t regulated but we’re open to that possibility.”

He disputed TUANZ’s assertion that work on fixing the process so that more ISPs would sign up has taken two years and said that “great progress has been made”.

Stone declined to comment about the funding of the TDRS, although he did concede that it could increase if it became a regulated service. He wouldn’t comment on individual members, including Slingshot.

Slingshot has been approached for comment, but have not responded to our queries.