Investigation report:
Compliance with Clauses 6.4.1 and 6.4.2 of the Telecommunications Consumer Protections Code C628:2007 by Telstra Corporation Limited
August 2013
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Contents (Continued)

Findings

Background

Relevant facts

Findings and reasons—compliance with the TCP Code 2007

Findings

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Findings

The Australian Communications and Media Authority (the ACMA) is of the view that Telstra Corporation Ltd (ACN 051 775 556) (Telstra) contravened clause 6.4.1 of the Telecommunications Consumer Protections Code C628:2007 (TCP Code 2007) between February 2009 and April 2012 in respect of customers using international mobile roaming data services.

The ACMA is also of the view that the same conduct would have contravened clause 5.5.1 of the Telecommunications Consumer Protections Code C628:2012 (TCP Code 2012), had that code been in force at the time. The provisions under both the 2007 and 2012 TCP Codes are effectively identical, with the minor differences not being material in the present case. These preliminary findings about the TCP Code 2012 are made in light of subsections 121(1B) and 122(4) of the Telecommunications Act 1997 (the Act)).

Background

  1. This report presents the findings of an investigation conducted by the ACMA into Telstra’s compliance with the billing provisions of the TCP Code 2007.
  2. On 22 November 2012, Telstra contacted the ACMA to advise that in April 2012, it identified that it had overcharged 260,165 consumers a total of $30 million for international data roaming sessions. The overcharging began in October 2006. Telstra became aware of the issue on approximately 28 March 2012, during an investigation into an international roaming customer billing complaint. Upon discovering that the customer in question had been charged multiple session flagfall fees for a single session, Telstra initiated a wider investigation and audit.
  3. Telstra has provided the following information to the ACMA in relation to the overcharging:

a)Until January 2013, Telstra applied a retail $0.50 flagfall for each international roaming data session initiated by its customers.

b)In order to charge its customers for international data roaming sessions, Telstra relies on records (transferred account protocol files, or “TAP files”) provided by international carriers. These records include details on the customer’s usage, such as the time of usage, the amount of usage and the place of usage.

c)This information is sent to Telstra via a data clearing house. After the clearing house receives the files, it verifies that the call records conform to the GSMA TAP file standard (TD.57) for international roaming. It then applies the appropriate pricing on the records as per Telstra’s instructions, including data session flagfall fees. The clearing house then forwards the records to Telstra for billing.

d)As mobile devices can stay connected to the mobile network for extended periods of time, single data sessions can sometimes be split into multiple records to allow for timely charging of the end user. To allow for this, TAP files must carry an indicator (as required by TD.57) showing if the record applies to part of a data session.

e)A number of international carriers had not always appropriately completed this field when segmenting the sessions into multiple TAP file records.

f)The clearing house incorrectly interpreted each of these records as full sessions, instead of partial sessions, and passed on the erroneous information to Telstra.

g)As a result, customers were overcharged when multiple flagfall fees were applied for single sessions which had inaccurately been recorded as multiple sessions.

h)The full nature of the problem was identified in April 2012. Telstra then temporarily ceased charging flagfall fees for all international roaming customers until a solution was identified.

i)Telstra worked with the clearing house to develop a solution to accurately identify complete and partial sessions. This solution was tested and put into production in early July 2012 and was applied to call records from approximately 20 June 2012. Telstra advised it conducted monthly testing of the solution while it was in use.

j)The next stage of Telstra’s response was to rebate all customers - former and current - who had been overcharged since October 2006. The extraction and analysis of data took Telstra several months, so it did not begin contacting affected customers until 19 November 2012.

k)Telstra has provided the ACMA with detailed information about its rebate process, and the ACMA understands that as at the end of February 2013, 100% of active customers have been rebated and the process for contacting and rebating former customers is well advanced.

l)The Telstra resellers who were affected by the overcharging have all been identified and rebated.

m)Effective from 20 January 2013, Telstra has permanently ceased charging international roaming flagfall charges.

  1. Under paragraph 510(1)(c) of the Act, where it considers it desirable to do so, the ACMA may investigate contraventions of a code registered under Part 6 of the Act, or indeed any matter relating to the performance of the ACMA’s telecommunications functions, or the exercise of the ACMA’s telecommunication powers (except to the extent that the matter relates to the content of a content service). The ACMA commenced an investigation into Telstra’s compliance with the TCP Code 2007 on 30 November 2012.

Relevant facts

  1. The TCP Code 2007 was registered under Part 6 of the Act at the time the incident took place. It contains rules about how carriage service providers (CSPs) deal with their residential and small business customers.
  1. The rules apply to a range of CSP business practices, including billing.
  1. Telstra is a CSP within the meaning of the Act and a Supplier for the purposes of the TCP Code. Telstra is therefore required to comply with the provisions of the TCP Code as it applies to Telstra’s dealings with its residential and small business customers.
  1. Under clauses 6.4.1 and 6.4.2 of the TCP Code 2007, a supplier must ensure that it demonstrates Billing Accuracy (as defined in clause 2) and that its charges are consistent with what the consumer agreed to at the point of sale.
  1. Clause 6.4.1 of the TCP Code 2007 states that:

A Supplier must ensure and must be able to verify and demonstrate

Billing Accuracy, except for inaccuracies caused by:

(a)the Supplier’s reliance on information provided by a person who is not their employee or agent;

(b)an action or failure of another person who is not the Supplier’s director, employee or agent; or

(c)an accident, mistake or any matter beyond the Supplier’s control, where the Supplier took reasonable care and precautions to avoid the inaccuracy.

  1. Clause 6.4.2 of the TCP Code 2007 states that:

A Supplier must ensure that sufficient information is readily available to the Customer to allow them to verify that Charges are correct and consistent with:

(a)the Supplier’s published or contracted prices and Discounts; and

(b)what the Customer has requested, used or contracted to receive.

  1. On 19 December 2012, the ACMA sought information from Telstra using its information-gathering powers under subsection 521(2) of the Act. The ACMA asked Telstra to provide full details about the incident, along with information about its relationship with the clearing house. The information-gathering process was complete as at 25 February 2013.
  1. On 27 March 2013, the ACMA provided Telstra with the preliminary findings of this investigation. Telstra provided a response to these findings on 23 April 2013. Telstra’s further submissions have been considered prior to the ACMA forming a final view, and have been referred to in this report where relevant.

Findings and reasons—compliance with the TCP Code 2007

Telstra’s compliance with clause 6.4.1 of the TCP Code 2007

  1. Clause 6.4.1 requires Telstra to ensure that it can verify and demonstrate Billing Accuracy, allowing for certain exceptions as specified in clauses 6.4.1(a), (b) and (c).
  1. The effect of clause 6.4.1(a) is that a supplier would not be in breach of clause 6.4.1 where an inaccuracy is caused by reliance on information provided by a person who is not the Supplier’s employee or agent.
  1. Based on the information provided by Telstra, the ACMA understands that the overcharging resulted from international carriers failing to fill out the TAP file indicator for records relating to partial data sessions, the clearing house incorrectly interpreting these files as full sessions, and Telstra incorrectly charging the customer.
  1. Telstra has provided the ACMA with evidence about the nature of the relationship between Telstra and the clearing house. The ACMA notes that the contract outlines the particulars of the supply of the services between the parties along with each party’s obligations to comply with the relevant GSMA International Standards. These documents form the basis of the agreement between the parties.
  1. The agreement confirms that the clearing house is a contractor, and not an employee or agent of Telstra. Likewise, the international carriers are not employees or agents of Telstra.
  1. It is the ACMA’s view that, for the purposes of clause 6.4.1(a), a billing inaccuracy is not caused by reliance on information from another person in circumstances where the Supplier knew, or ought to have known, that the information was inaccurate. In considering the exception in clause 6.4.1(a), the ACMA considered whether, having regard to the duration of the overcharging and opportunities to identify and address the inaccurate information provided by the clearing house, Telstra ought to have known prior to March 2012 that the information provided by the clearing house was incorrect.

Complaints received

  1. As noted in paragraph 2, Telstra became aware of the overcharging during an investigation into an international roaming customer billing complaint. The complaint in question was received on 12 March 2012.
  1. Telstra has provided the ACMA with information pertaining to four other complaints it received from 2009 to 2012, which relate to the number of international roaming data sessions for which Telstra had charged, where it has subsequently been identified that the customers were overcharged in relation to data provided by the clearing house. These complaints were received on 20January 2009, 11 August 2009, 3November 2011 and 10 December 2012 respectively.
  1. Of these four complaints, three were received prior to the complaint which resulted in Telstra identifying the overcharging.
  • The first complaint, 1-153865232, made on 20 January 2009 states:

...Customer also advised that he didnt log on 4 times and only logged on once but account states that he was 4 different sessions on the account...

  • The second complaint, 1-165282320, made on 11 August 2009 states:

... To my dismay, on returning, I have incurred 760 access charges for WAP calls to establish internet access costing in excess of $600. I have called Billing Enquiries but was informed these charges are for access to data networks passed on from overseas providers. I am querying the number of access charges firstly and secondly the excessive charges. In some instances I have been charged $0.57 for 2 secs access. Many calls at this cost are for less than 15 secs access...

  • The third complaint, 1-78275932936, made on 3 March 2011 states:

...Cust was overseas in Bali and customers itemised statement shows alot of internet sessions, cust is unsure the bill is correct and would like someone to investigate further as there are quite a few charges at the exact same time. Cust would like to know what internet sights where (sic) visited if possible...

  1. It is the ACMA’s view that had Telstra investigated any of these three complaints, it would have discovered that the customers in question had been overcharged because of flaws in the data provided by the clearing house and could then have taken steps to prevent any further related overcharging.
  1. Telstra has submitted that its handling of these complaints was appropriate, and disputes that investigation of them would have revealed an underlying problem. Specifically, Telstra submits that the complaints in question:

a)did not create any recognisable pattern of an underlying issue;

b)were all received by a front of house team that is accustomed to dealing with high volumes of calls, and who are motivated to resolve the customer’s most pressing concern, which often results in a credit being applied;

c)were all received at a time the front of house team would not have had access to information detailed enough to uncover the data session fee (this access became available in November 2011, but it was previously only available to specialised teams);

d)could all be resolved appropriately without needing to address data session fees, nor did these complaints inevitably lead to an investigation about data session fees.

Conclusion

  1. In summary, the ACMA has carefully considered the exception in clause 6.4.1(a), having particular regard to the following facts:

a)Telstra incorrectly charged its customers based on incorrect information received by the clearing house and international carriers, neither of which are Telstra agents or employees;

b)Telstra had three opportunities to identify and address the overcharging prior to March 2012, the first being 20 January 2009 which should have been identified by February 2009;

c)while there were quality assurance practices in place, there is no evidence that any quality assurance was conducted on whether the partial type indicator field was being filled out correctly.

  1. The ACMA has also had regard to Telstra’s submissions regarding the complaints received between 2009 and 2012. While the ACMA acknowledges the high volume of enquiries and complaints received by Telstra, and understands that in many instances a credit may be an efficient response to a billing complaint, the fact remains that each of the complainants in question was overcharged for the same underlying reason. Moreover, Telstra failed to identify or address the underlying reason which led to the substantial billing inaccuracies that spanned a period of a number of years. Had any of these complaints been investigated[1], Telstra could have identified the cause of the problem.
  1. Having regard to all of the above, the ACMA has formed the view that Telstra, from February 2009, should have identified the flaws in the clearing house data and the related potential for overcharging. Accordingly, billing inaccuracies associated with flaws in the clearing house data after February 2009 were not caused by the actions or information of the clearing house but by Telstra’s failure to identify those flaws in circumstances where it should reasonably have been able to do so. The ACMA has therefore formed the view that Telstra contravened clause 6.4.1 of the TCP Code 2007 between February 2009 and April 2012.

Telstra’s compliance with clause 6.4.2

  1. Clause 6.4.2 of the TCP Code 2007 requires Telstra to ensure that charges are correct and consistent with Telstra’s published or contracted prices and discounts, and with what the customer has requested, used or contracted to receive.
  1. The Industry guideline for the TCP Code 2007, which was designed to “aid in interpreting the TCP Code Rules; and provide examples of how a Supplier may choose to comply with the Rules”, states in relation to clause 6.4.2 that:

Information may be provided either in or with the Bill or be otherwise readily available such as through your:

  • Billing Enquiry number
  • Website
  • Brochures; or
  • Other information on Pre-Paid services

If the Charges are Third Party Charges, an itemised Bill containing sufficient information could include:

  • Third Party Identification or provider name
  • Telecommunications Product
  • Number called
  • Call duration
  • Data/time; and
  • Charge

if the Third Party service provided has provided this information to you.

  1. Also in the Guideline in relation to “Itemised Charges” (Code 6.4.4) the Guideline states, “Unless the Customer agrees or requests otherwise, Itemised Charges need to be provided but they do not need to be provided in the Bill itself”.
  1. Telstra has provided the ACMA with information on the various channels through which customers can access information about charging for international roaming products, including information about the $0.50 flagfall fee.
  1. Telstra has also provided the ACMA with a selection of actual customer invoices, showing how international data was billed from October 2006 to April 2012. While the invoices only include a summary of international roaming data charges, Telstra has also provided information to verify that itemised records are available in all cases if requested by a customer. Telstra has provided examples of these itemised records to the ACMA. These records include the date, time, location, duration and amount for each data session.
  1. Having examined the information provided, the ACMA has found that Telstra complied with clause 6.4.2, as detailed information on Telstra’s pricing was available to customers, and customers had access to itemised billing. By comparing the itemised billing with Telstra’s pricing information, customers had the ability to check whether the billed amounts were correct and consistent with Telstra’s charges, and what they had used or contracted to receive.

Findings

  1. Having assessed the evidence and information before it, the ACMA is of the view that Telstra contravened clause 6.4.1 of the TCP Code 2007 from February 2009. The ACMA has formed this view because Telstra failed to take appropriate action to ensure that it verified and demonstrated billing accuracy after it received complaints about inaccurate billing for international data roaming sessions.
  1. The ACMA is also of the view that the same conduct would have contravened clause 5.5.1 of the TCP Code 2012, had that code been in force at the time, given that this provision is almost identical to clause 6.4.1 of the 2007 TCP Code and the minor differences are not material to the factual circumstances of the present case.
  2. The ACMA’s investigation also looked at whether Telstra’s current billing practices for international data roaming sessions are compliant with clauses 5.5.1 and 5.5.2 of the TCP Code 2012. Telstra has provided the ACMA with information on both the proactive and reactive systems it has in place to ensure correct billing for international data roaming, and more broadly. Telstra has also advised that it will be implementing a proactive testing assurance platform that will regularly test international roaming charges from usage to bill, with quarterly formal reviews. It has also provided information on the action it has taken to ensure that the current problem was rectified, including the removal of the flagfall fee for international data roaming sessions. Lastly, it has confirmed that detailed information on international data roaming charges is available to customers, and itemised charging can be provided on request. The ACMA is therefore satisfied that Telstra is currently compliant with clauses 5.5.1 and 5.5.2 of the TCP Code 2012 in relation to billing for international data roaming sessions.

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[1] Telstra has confirmed that for each of the complaints, it chose to give the customer a credit without conducting any further investigation.