ISPs cop more flack: from telecoms ombudsman

Stuart Corner
Wednesday, 07 February 2007 10:11

IT Policy - Regulation

The Telecommunications Industry Ombudsman, John Pinnock, has voiced concerned about the growing number of complaints from Internet customers who have had their contracts changed without their agreement. His comments come just days after the ACCC warned broadband ISPs about making misleading statements on service speeds.

"Most ISPs require customers to sign fixed-term contracts before they can receive a service," Pinnock said "Customers are telling us that often, after a short period of the contract has elapsed, they have received notification from their provider that the price of their plan will increase or that the speed or usage limits will be reduced."

"For example, an internet service provider may significantly lower the usage limits of its broadband plans and then seek to charge customers an early termination fee if they wish to cancel," Pinnock said.

According to the industry Consumer Contracts Code, which was developed with input from the service providers, a fixed-term contract may only be varied without the customer's consent on condition that: the customer is given 21 days written notice of the change; and the customer is given a further 21 days to cancel without penalty.

The Ombudsman added that if a customer wanted to leave a contract where the terms and conditions had been varied without their consent, and to their detriment, the ISP could only recover: any usage, installation and access charges outstanding at the date the contract ended; and the costs of any equipment associated with the contract only if the customer could use the equipment with another service provider.

All internet service providers are required by law to be members of the TIO scheme.