Telecommunications debt in rural and remote Indigenous Central Australian communities: Loans & Phones Project Phase 3

Telecommunications debt in rural and remote Indigenous Central Australian communities: Loans & Phones Project Phase 3 Report

  • Author(s): Cartwright, C, McAuliffe, C
  • Published: 2020
  • Publisher: MoneyMob Talkabout

Abstract: This report examines telecommunications debt in regional and remote Indigenous Central Australian communities; specifically, how mis-selling by telecommunications service providers and regulatory weaknesses led to widespread systemic debt for Indigenous telco consumers. Our work over the last two and a half years has found hundreds of Indigenous telco consumers in Central Australia (and some consumers in other parts of the country) with large mobile phone debts. Almost all were unaware that the manner in which they had been sold plans did not meet appropriate consumer protection standards, and in fact suggests a culture of cavalier behaviour existed where telcos were pushing sales at the expense of meeting a consumer’s needs. For the remote Indigenous consumers we talked to for the purpose of this work, a pattern of sales practices bordering on predatory was revealed, with significant numbers of people sold mobile devices, accessories and plans that they neither needed nor could afford, on contracts that they did not understand. Amongst the hundreds of cases we have documented are some confronting examples of indifference to a generally vulnerable cohort; consumers with severe mental illnesses, in situations of homelessness and where there was clear evidence that the purchaser was not going to be the end user of the phone. In some cases, salespeople manipulated the sales interaction to sell more products - for example, by using the family members listed on a Medicare card to persuade a consumer they needed more devices. The substantial majority of cases we reviewed were people who were in receipt of government benefits only. Many reported that contract obligations and additional costs were not explained to them at the point of entering into the contract. Nor did most have any idea of the existence of financial hardship schemes. New mobile phone technology which should have paved the way for bridging the communications gaps in remote communities instead became yet another area of financial burden and stress for too many Indigenous people. This project took place in challenging times. The work was restricted by deaths in the remote communities we visited (including a death in custody) and constrained by the onset of the COVID-19 pandemic which required us to suspend outreach visits for a number of months. Despite these challenges, another $108,273 worth of telco debt was documented during our outreach trips in Northern Territory remote Indigenous communities; enough to suggest that if the resources to intensively canvass this issue existed, a lot more historic debt might be out there. In total, over the last two and half years, we have now (including some cases of interstate sales to vulnerable consumers) recorded a total of $1,123,297.09 where the circumstances of the sales raise concerns. Most of our findings relate to Telstra, which is the sole service provider in many remote Indigenous communities. However examples of poor practice from other telcos were also found. Perhaps unsurprisingly, there is evidence that the arrangements between Telstra and its licensees exacerbated this problem. Telstra itself has acknowledged this and taken a range of actions since 2019 to mitigate the issues that were uncovered. These have included the separation of handset contracts from data contracts; simplification of plans from many hundreds down to 20; the introduction of "Peace of Mind” month to month plans which prevent consumers from accruing excess data charges and prominently displaying the total cost of handsets in some stores so vulnerable consumers immediately understand this information. These actions will likely address the issues seen up to mid-2019, where many debts were accrued with a large component of excess data charges. However, our analysis suggests the structure of business arrangements between Telstra and its licensees retains some elements which could still in future result in sales staff minimising vulnerability or affordability concerns in favour of making a sale. A regulatory environment that also fails to connect with Indigenous consumers or their experience contributes substantially to the problem. Some of the case studies that we have documented – from here and around Australia - suggest that even though the Telecommunications Industry Ombudsman knew after its October 2018 systemic issues investigation that questionable sales practices were an issue, this knowledge did not flow through to their complaints resolution area. Certainly, financial counsellors were submitting cases to the TIO during 2019 which should have been recognised as unfair sales. However frontline TIO complaints staff seem rarely to have acknowledged the possibility of unconscionable conduct in the sales practices before them. Instead, some of the case studies we have collected suggest they preferred to push financial counsellors and community lawyers down the path of a financial hardship claim in resolving complaints (and at times to take a personal or moral position rather than reaching resolutions commensurate with breaches of rules and obligations by the industry, including potential breaches of Australian Consumer Law). The result is a continuing perception that the TIO takes a fairly meek line with the telco industry. We conclude with recommendations for better engagement between telcos and Indigenous consumers especially in remote communities, improved clear and easy to understand consumer information, and legislative and regulatory reform.

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Suggested Citation
Cartwright, C, McAuliffe, C, 2020, Telecommunications debt in rural and remote Indigenous Central Australian communities: Loans & Phones Project Phase 3, Report, viewed 15 February 2025, https://www.nintione.com.au/?p=42520.

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