Commission recommends improvements to dispute resolution

Commission recommends improvements to telco dispute resolution scheme

The Commerce Commission has released for consultation a draft report recommending improvements to the Telecommunications Dispute Resolution Scheme (TDRS) so that it delivers better outcomes for consumers and industry. The recommendations are based in part on findings from an independent expert report by consultancy cameron. ralph. khoury (CRK).

The TDRS was created by industry body the Telecommunications Forum New Zealand Inc. (TCF) to deal with consumer complaints about mobile, internet, and landline services more than a decade ago. As a result of changes made to the Telecommunications Act in 2018, the Commerce Commission is required to review the scheme at least once every three years and to report to the TCF on any recommendations to improve the service.

Telecommunications Commissioner Tristan Gilbertson said that while the TDRS does some things well, it needs to raise its profile and performance in order to become a trusted and useful tool for consumers and telecommunications providers.

“Consumer complaints in the telecommunications sector have doubled over the last five years. This indicates that many of the problems that led to the scheme being established persist,” he said.

“There has never been a greater need for an effective industry dispute resolution mechanism – but our work shows that most consumers have never heard of the TDRS and, even if they have, they can find themselves locked out because many basic issues, including some speed and performance problems, are currently excluded.”

Mr Gilbertson said that this results in significant fragmentation of consumer complaints with a large number being raised with the Commission, different agencies of Government, or organisations like Consumer NZ and the Citizens Advice Bureau.

“This means the scheme is not working as effectively as it should because consumers and industry benefit when complaints are dealt with quickly and efficiently by providers or by an industry body set up specifically for that purpose,” he said.

“The recommendations we are putting forward today set out a pathway forward for the TDRS that will further boost awareness, capture more aspects of retail service quality, lead to faster resolution of complaints, and generally improve the governance and independence of the scheme.”

The TCF is an industry body whose membership is made up of both retail and wholesale telecommunications providers. The Commission’s review of the TDRS has identified that adjustments to the governance structure are needed to ensure the TDRS Council is fully independent of the TCF, and to establish clear lines of accountability. The TDRS Council is a governing body comprised of four consumer representatives and four industry representatives.

The Commission’s report also recommends that a significant number of changes are needed to the TDRS Customer Complaints Code to better align the scheme with consumer expectations, capture more retail service quality issues, and generally achieve better outcomes for consumers. It has also recommended a full review of the scheme’s Terms of Reference (ToR) and a revised agreement between the TCF as the scheme agent and the dispute resolution provider.

“We have phased our recommendations so that those changes that will make the biggest difference for consumers – such as increasing awareness of the scheme and removing barriers to accessing the scheme – are prioritised over other changes that are likely to take more time – such as governance-related changes to increase the independence of the scheme,” Mr Gilbertson said.

“This will provide a balanced pathway for change backed-up by regular monitoring and reporting requirements to track whether the change programme is being delivered effectively.”

The draft report follows consultation with the sector and other interested parties. The Commission published an open letter in October 2020 seeking views on the TDRS. In March 2021, the Commission published a document outlining its approach to reviewing the scheme, followed by an issues paper in April outlining the issues it intended to explore.

The draft recommendations and the proposed timeline for the TCF to implement them are in the report on the Commission’s website, alongside the CRK expert report. The Commission is now seeking views from interested parties on both reports, with submissions due by 5pm, Monday 27 September 2021. Final recommendations will be published on 11 November 2021.

Background

Part 7 of the Telecommunications Act 2001 was introduced by Government in 2018 to provide the Commission with powers to focus on consumer matters and, in particular retail service quality. A key element of Part 7 is to provide a forum in which consumers can seek independent resolution of their complaints against their telecommunications providers.

The TDRS is the current industry dispute resolution scheme for consumers who have disputes with their service providers about mobile, internet and landline services. It is also the dispute resolution service for disputes related to the Commission’s 111 Contact Code and Copper Withdrawal Code.

The Commission is required to review the TDRS at least once every three years, and to report on any recommendations for improving the scheme. This is the first such review of the TDRS.

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