Over 100,000 Telco Customers Left With A Harder Road To Complain, Says Commission

The Commerce Commission has today published a list of telecommunications providers who are, and who are not, members of the Telecommunications Dispute Resolution Scheme (TDRS).

The Commission says non-members – including Contact Energy, InspireNet, Lightwire and Voyager – leave over 100,000 Kiwi consumers locked-out of the free and independent industry dispute resolution scheme.

TDRS was created over 10 years ago to resolve issues between telecommunications providers and their consumers.

Bespoke dispute resolution schemes are now common in many sectors – including utilities, financial services, and health – because they provide a fast and effective mechanism for resolving issues that are often technical and complex and benefit from specialist knowledge and handling.

However, unlike schemes in other sectors, membership of TDRS is voluntary, meaning that telecommunications consumers are only protected if their provider chooses to belong to TDRS.

Telecommunications Commissioner, Tristan Gilbertson, says this is problematic given the high levels of consumer complaints in the telecommunications sector.

“We don’t want consumers to find that they’re locked out of the scheme at the time they need it the most – when they run into a problem that they can’t resolve with their telecommunications provider.

“The Commission has encouraged all telecommunications providers to sign up to ensure customers have equal recourse when it comes to disputes and that industry participants are on a level playing field.”

Mr Gilbertson said the list published today shows that large providers, earning telecommunications revenues of over $10 million annually, are members of TDRS – except for Contact Energy, InspireNet, Lightwire and Voyager.

“It’s great to see that most providers are committed to doing the right thing when it comes to customer disputes – but we’re disappointed that these four providers don’t appear to feel the same responsibility.

“These providers are profiting from providing telecommunications services to New Zealand consumers while avoiding the accountability that TDRS is designed to provide.”

The largest of these is Contact Energy, which serves some 70,000 telecommunications customers nationwide.

“The concern is that many of Contact’s customers may not be aware that it isn’t a member of TDRS and that, if any problems arise, they can’t sort them out using the specialist industry scheme.”

While Contact is a member of the energy dispute resolution scheme – Utilities Disputes Limited (UDL) – its absence from TDRS means things get more complicated with the bundled telecommunications and energy services it is promoting in the market.

“If there are issues with these bundles, which we recently found can be problematic, customers have no recourse to TDRS, and UDL has no jurisdiction over telco disputes – leaving customers stuck in an unhelpful position,” says Mr Gilbertson.

“Customers need to know when they’re being sold services by providers who won’t give them access to the industry dispute resolution scheme when things go wrong – as well as providers who will – and that’s exactly what the list we’re publishing today is designed to show.

“We encourage consumers to use this information, and consider the value of access to TDRS, when choosing or renewing with a telecommunications provider.”

The Commission will keep the TDRS list updated to reflect any changes in membership so that consumers have access to current information.

“We encourage all providers who are not yet members to join TDRS, so that their customers can access the industry disputes scheme in the same way as all other telecommunications consumers in New Zealand,” he says.

The list of members and non-members of TDRS can be found here.

Note to Editor

In our recent Product Disclosure Emerging Views Paper, we highlighted that comparisons between telcos can be problematic for consumers when those services are bundled together with energy. These bundles can look attractive at face value, but the prices for the energy services included in the bundle are not always clear upfront, and the bundled prices can be higher than the prices available on a stand-alone basis with the same provider. This can quickly reduce the benefit of any broadband discount and, as a result, bundled offers do not always result in the savings consumers might expect.

The Commission wrote to providers in July 2022 with proposed disclosure requirements for TDRS membership. In September 2022, after consultation, we confirmed we would publish a list of members and non-members. Following that, Nova Energy signed the TDRS scheme deed and is currently going through compliance checks which will be completed no later than 28 February 2023. Nova customers will have access to the TDRS after that date.

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