The Australian Communications and Media Authority (ACMA) has formally cautioned budget telco Dodo over its failure to warn customers who exceed their monthly data allowance.
The Australian government introduced new rules in September last year that require telcos to alert customers when they have used 50, 85 and 100% of their data or voice allowances in a billing period.
While research shows complaints from Aussies stung by extra data costs are on the rise, Dodo is the first company to be found to have breached the new rules.
Dodo failed to alert around 3300 of its fixed broadband customers in October 2013 and nearly 2000 fixed broadband customers during November 2013.
ACMA investigated seven large and medium telcos in a recent investigation, with only Dodo’s fixed broadband division falling foul of the new code.
Alan Chalmers, ACMA manager of consumer interests, told SmartCompany there has been excellent compliance across the industry, with most telecommunications companies exceeding the minimum requirements of communicating with their customers.
Chalmers says Dodo has worked swiftly to fix the IT faults responsible for preventing the alerts from reaching customers, while also compensating affected customers and capping excess usage charges.
“We were satisfied with Dodo’s response, which is why they only received a warning,” says Chalmers.
The formal warning is the first stage of a process ACMA goes through with telcos. Had Dodo not acted, they may have been liable for legal action.
Chalmers says many of the telcos have complicated IT systems with warning systems “just tacked on”, but most of the big players now had back-up systems in place to make sure their warning messages were delivered in the face of a technical breakdown.
“They’re taking their obligations very seriously,” he says.
Chalmers said that while only residential customers were affected in Dodo’s breach of the code, businesses should be aware there is no mandatory obligation for telcos to warn their corporate clients about data usage limits.
“I would anticipate some small business people, particular small small businesses, would be getting these types of alerts,” he says. “But the rules that allow users to check their usage themselves still apply.”
Chalmers says he urges business customers to be wary of their data limits and consider going up to the next level of data if they are exceeding limits each month.
“Our view is the people on included value plans are frequently incorrectly estimating their data requirements,” says Chalmers.
“More commonly if someone is using 2GB a month and there are on an included value plan which covers 1GB a month, then they are at risk of paying excess usage charges for the second GB.”
“There are enough pre-paid and stepped plans available that people have options to avoid excess usage charges,” he says.
Dodo was contacted for comment but SmartCompany did not receive a response prior to publication.