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ACCAN Customer Service Project (25 August 2009)

       

Australian Communications Consumer Action Network (ACCAN)

Customer Service Research Report

25 August 2009

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This Research Report has been prepared by Galexia for the Australian Communications Consumer Action Network (ACCAN) <http://www.accan.org.au/>.

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Galexia version 6 - 25 August 2009

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Copyright © 2009 Galexia.

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1. Executive Summary

Objectives

This project provides advice and an opinion on mechanisms to enhance customer service in the Australian communications sector, including:

  • The efficacy of a proposed customer service charter for the telecommunications industry with enforcement provisions; and
  • The effectiveness of the current consumer codes, and code development and review process.
Key findings

This research project made a number of key findings regarding the efficacy of customer service charters in the communications sector:

  • Voluntary stand alone service charters (one per organisation, with no common template or guideline) have not proved useful to Australian consumers in the communications sector to date. EDR schemes do not appear to receive complaints based on charter breaches, the presence of a charter does not necessarily indicate good customer service, and there are very few current charters in the sector.
  • Industry and consumer interest in charters appears to have peaked in the late 1990s and then waned. The current profile of private sector customer service charters (both in Australia and overseas) is low. It may be difficult to re-invigorate the charter movement – skills and expertise in those areas has moved on to focus on the development of codes of conduct and other regulatory tools.
  • The content of customer service charters is inconsistent and very poor from a consumer perspective. It is unlikely that there is anything in a charter that would help to address current consumer issues in the communications sector. A large proportion of consumer complaints (e.g. to the TIO) involve product and service issues that fall outside the content of charters.
  • There is a considerable disconnect between consumer expectations of the content of service charters and business expectations of the content of service charters (as evidenced by examples of private sector charters in Australia). Key consumer issues such as affordability are not even mentioned in service charters.
  • For those consumer issues that might be covered by a charter (e.g. timely response to an inquiry) the content of charters is written at such a high-level that they are unlikely to provide any additional consumer rights. Where service charters merely restate existing requirements, their value is limited.
  • Service charters do not generally include arrangements for enforcement, sanctions, remedies or compensation. They will have little impact amongst organisations who are currently causing consumer concerns, unless backed up by considerable enforcement powers.
Key recommendations

The clear conclusion from this research is that customer service charters are not an appropriate regulatory option for the communications sector in Australia at this time.

In particular, customer service charters compare unfavourably with other regulatory tools such as codes of conduct. Although codes of conduct have not been working effectively in the Australian communications sector in recent years, there are significant initiatives under way to improve the code development and approval process, and to re-invigorate code monitoring and enforcement. Those initiatives would appear to offer significantly more promise than diverting efforts to the development of service charters.

Methodology

The research project included a detailed review of literature and of policy / best practice guidance in Australia and internationally, backed by the collection and analysis of current examples of customer service charters.

Participants
  • Australian Communications Consumer Action Network (ACCAN)
    The project was commissioned by ACCAN – the new peak body for consumers and consumer organisations on issues including telecommunications and the Internet.
  • Galexia
    The project research and writing tasks were undertaken by Galexia. Galexia is an independent consultancy specialising in law and technology.
  • Advisory Committee
    The research project was guided by input from an Advisory Committee consisting of experts in consumer protection and communications regulatory issues. Members included:
    • Catriona Lowe, ACCAN Board (Chair)
    • Keith Besgrove, Department of Broadband, Communications and the Digital Economy (DBCDE)
    • Kathleen Silleri, Australian Communications and Media Authority (ACMA)
    • Christina Spurgeon, Queensland University of Technology
    • Simon Cleary, Telecommunications Industry Ombudsman
    • Gerard Goggin, UNSW, ACCAN Board.

2. The role of service charters

2.1. Defining service charters

Service charters generally operate in an unregulated environment, with no definitions and only limited guidelines or standards for their development or operation.

The general community understanding of a service charter is that it is a short document outlining an organisation’s commitment to customer service and containing specific promises regarding standards and services.

However, when the content of service charters is examined, there is such a broad and diverse range of promises and approaches that a single definition struggles to cover the entire range. Some charters target retail consumers, others target business and professional clients. Some charters include high-level commitments, others contain specific detailed promises.

There is a temptation to avoid definitions and say that anything that is labelled by an organisation as a service charter is therefore a service charter. However, there may be dangers in allowing service charters to continue to develop free from definitions, guidelines or regulations. One service charter examined in this study (Origin Gas) is labelled as a service charter, but is written as a standard set of legal terms and conditions. It does not actually contain any consumer promises and should not be categorised as a customer service charter.

Some useful definitions of customer service charters are available:

Economic Regulation Authority Western Australia, Customer Service Charter Guidelines:
A charter can be broadly defined as a published statement containing:
  • A list of customer entitlements;
  • Details regarding a licensee’s services; and
  • Information relevant to the relationship between the customer and the licensee.[1]
Australian Public Service Commission:
A service charter is a short publication that informs the client about the agency's services, outlines relevant avenues of communication, details relevant service standards, and outlines client rights and responsibilities including feedback and available complaint mechanisms.[2]

It is important to note that there are also examples of ‘charters’ developed by consumer representative organisations. These are very different instruments that set out consumer rights as a tool for advocacy and reform. Examples include:

  • Draft Australian Charter of Communications Rights
    Consumers Telecommunications Network (CTN)
  • Charter of Consumer Rights in the Digital World
    Trans Atlantic Consumer Dialogue[3]
  • Draft Charter of Consumer Digital Rights
    CHOICE[4]
  • Charter of Health Consumer Rights
    Consumers Health Forum of Australia Inc (CHF)[5]
  • Consumer Charter for Global Business
    Consumers International[6]

There is a significant difference between the standards contained in these consumer driven charters, and the customer service charters developed by organisations.

2.2. Comparison with other regulatory tools

This section compares service charters with other common regulatory tools. A wide range of regulatory tools is available in the communications sector, and they are typically ranked by descending strength (tested by enforceability) as follows:

  • Laws;
  • Regulations;
  • Licence requirements;
  • Customer Service Guarantees;
  • Codes of conduct;
  • Standards;
  • Customer Service Charters; and
  • Service marks.

Service charters developed by organisations can be divided into two categories:

  • Voluntary service charters
    Under this option, organisations in a sector are free to decide whether or not they develop a service charter. Some limited guidance may be available on content, but organisations are ultimately free to decide their own content.
  • Mandatory service charters
    Under this option, organisations in a sector are required to develop a service charter. This may be as a result of regulations or licence conditions. Some more detailed guidance is likely to be available regarding the content of a service charter, including example promises or even a template.

In this comparative study it is assumed that codes of conduct are operating reasonably effectively. This has not always been the case in the communications sector,[7] although there are now significant initiatives underway to reform and reinvigorate the use of codes of conduct in the communications sector.[8]

Overall, customer service charters perform well on issues such as access, costs and flexibility. However, they perform poorly on the strength of their content and enforcement issues, especially when compared to mandatory codes and laws.

The following table summarises the key features of service charters when compared to other common regulatory tools:

Regulatory Tool

Voluntary service charters

Mandatory service charters

Voluntary codes

Mandatory codes

Law

Industry Coverage

Poor

Moderate

Poor

Moderate

Good

Ability to keep up to date

Good

Good

Good

Moderate

Poor

Strength of content

Poor

Poor

Poor

Moderate

Good

Consumer input

Poor

Moderate

Moderate

Good

Good

Level of detail

Poor

Poor

Good

Good

Good

Enforcement

Poor

Poor

Poor

Moderate

Good

Integration with EDR

Poor

Moderate

Poor

Moderate

Moderate

Access / cost to consumers

Moderate

Moderate

Moderate

Moderate

Poor

Cost to develop

Good

Good

Moderate

Moderate

Poor

Cost to maintain

Good

Moderate

Moderate

Moderate

Good

 

3. History of service charters

It is important to understand the overall history of customer service charters, to enable an assessment of whether service charters are the correct regulatory tools for the communications sector at its present stage of development.

3.1. International

The first high profile customer service charters emerged in the United Kingdom in the early 1990s. Activity in the UK peaked in the late 1990s with a requirement for every government agency to have a service charter. However, interest in service charters has subsequently waned, and the requirement for UK Government agencies to have a service charter is no longer in place. This has now been replaced by a customer service standard and the use of an audited service mark (a tick that appears on websites). Only a small number of service charters remain in place in the UK, mainly in the local government sector.

There was a period of limited activity in Canada regarding service charters, where they were implemented by both private sector and public sector organisations between 1998 and 2004. Very few examples remain in use today.

In the United States there has been a moderate level of interest in service charters for the private sector since the early 2000s. The private sector is very lightly regulated and service charters are sometimes used as a means of differentiating an organisation from its competitors. However, there is some evidence of a consumer backlash against service charters in the US – as the presence of customer service charters did not always translate into improved customer service, resulting in concerns about wasted resources and missed opportunities. The following post is a good summary of the concerns expressed during this period:

Too many organizations ‘commit’ to customer service and then, instead of putting effort into actually understanding their customers’ needs and meeting them, the effort goes into ‘spinning’ customer service. Hence overblown job titles, wordy customer service charters and more hollow statements of commitment than the average election campaign.[9]

There are some examples of customer service charters in other jurisdictions, but it is difficult to assess how these may be relevant to Australia (e.g. Tanzania). Overall there is no global movement or trend towards the use of service charters, and the period of greatest activity has now passed. There are also no current international examples of a requirement to have a service charter, and there are no current service charter templates or guidelines in place in other jurisdictions.

The following table summarises the peak periods of international activity on customer service charters.

Country

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09

Australia





X

X

X

X

X

X

X

X

X

X

X

X

X

X

Canada







X

X

X

X

X

X

X






UK

X

X

X

X

X

X

X

X

X

X

X

X

X

X





USA











X

X

X

X

X

X

X

X

  

3.2. Australia

The first notable activity in Australia regarding customer service charters was in 1994 when several states (NSW, SA, WA) began implementing service charters for Government agencies based heavily on the UK experience. In 1994 the Western Australian Government published Developing customer service charters: a practical guide.[10] For a short period service charters were mandatory in WA.

In 1996 AAMI Insurance launched their Customer Service Charter. This was the first high profile charter in the private sector (it is still the best known charter in Australia today).

In 1997 the Commonwealth Government issued a directive known as the ‘More time for business’ statement. The directive required all federal agencies that deal with the public to develop service charters.

Telecommunications sector service charters first appeared in the period immediately prior to and after the part privatisation of Telstra and the deregulation of the telecommunications industry in 1997-1998.

In 2000 Victorian public transport operators released customer service charters, overseen for a short period by a Customer Service Charter Committee that included community representatives (this is another good example of post privatisation service charters).[11]

Some local government service charters were developed in the period 2001-2004, although most of these have subsequently fallen into disuse.[12] By 2003, the Australian Public Service Commission reported that sixty-eight APS agencies had a service charter in place (many of these were internal).[13]

In 2005 the Victorian Essential Services Commission developed a Customer Services Code containing requirements for mandatory customer service charters for water utilities (these requirements are still in place in the latest version of the Code in 2008).[14]

In 2005-2006 there was considerable activity in the energy sector as service charters were implemented post privatisation in Victoria and Western Australia. Customer Service Charter Guidelines were published by the WA Economic Regulation Authority in 2006.[15]

There was continued activity in the Commonwealth public sector regarding service charters from 2003 to 2009. For example, ASIC proposed a service charter in 2006[16] (although really targeted at small business / professional customers).

From 2005-2008 a ‘customer charter award’ was included in the Australian Customer Service Institute annual awards. Winners included ANZ, AAMI and Medicare. It is important to note that the award criteria are based on the International Customer Service Standard – a private standard that is NOT affiliated with the International Standards Organisation (ISO) in any way and is NOT an official Australian Standard.

Finally, there has been some renewed interest in customer service charters in the communications industry in Australia, including the potential development of a draft set of Customer Service Charter Principles by the Communications Alliance scheduled for later in 2009.[17]

The following table summarises the peak periods of Australian activity on customer service charters.

Sector

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09

Finance




X

X

X

X

X

X

X

X

X

X

X

X

X

X

Communications






X

X

X

X

X

X

X

X

X

X

X

X

Government









X

X

X

X

X

X

X

X

X

Local Govt.










X

X

X






Energy












X

X

X

X

X

X

Transport














X

X

X

X

 

3.3. Lessons from history

The history of service charters in Australia and elsewhere provides some useful lessons:

  • Service charters are often implemented post-privatisation, while a new industry is dealing with the move into a commercial / competitive environment and Governments are attempting to provide additional consumer protections. This experience is common in many jurisdictions and includes experience in the telecommunications, transport, water and energy sectors;
  • Service charters are also sometimes implemented as Government services are delivered to the community by quasi-government agencies (e.g. Australia Post);
  • In the commercial sector customer service charters appear to be driven by ‘bottom-up’ initiatives – e.g. a single company acting alone to differentiate itself from competitors (e.g. AAMI). They are not usually driven from above (e.g. government requirements) except for the period post-privatisation;
  • Overall, private sector service charter activity peaked in the 1990s and appears to have passed. In any case, there was never a period when service charters were more dominant / effective than other regulatory tools (laws and codes). Rather, service charters have complemented laws and codes, usually for a short period following privatisation; and
  • There is continued interest in service charters in the Australian government sector, but government interest in service charters in other jurisdictions has waned.

4. Examples of customer service charters

4.1. Australian examples

This study has collected examples of service charters that remain in force in Australia. The study analysed 30 of the higher profile customer service charters that can be easily found / accessed across a diverse range of organisations in Australia (including government and private sector). All of these examples are posted on public websites. There are only a small number (five) in the communications sector:

Name

Date

Sector

Target audience

Compensation for breach

AAMI

1996

Insurance

Consumers

Yes

AAPT


Communications

Consumers

No

ACCC

2008

Public

Consumers/ Professionals

No

AGL

2008

Energy

Consumers

No

ANZ Australia


Banking

Consumers

No

ASIC

June 2006

Public

Professionals

No

Australia Post

September 2008

Public

Consumers

No

Blue Central


E-commerce

Consumers / Professionals

No

Centrelink


Public

Consumers

No

Citipower

September 2006

Energy

Consumers

Yes

Cityrail

2009

Transport

Consumers

No

Click Energy

January 2009

Energy

Consumers

No

Dept of Primary Industries and Water


Public

Consumers

No

Energy Safe Victoria


Energy

Consumers

No

Enterprise Connect

22 October 2008

Public

Professionals

No

Freshtel


Communications

Consumers

No

iiNet


Communications

Consumers

No

Integral Energy


Energy

Consumers

No

IP Australia

2009

IP

Professionals

No

iPrimus


Communications

Consumers

No

Main Roads Western Australia

2007

Roads

Consumers

No

Medicare Australia

9 March 2007

Public/ Health

Consumers

No

National Childcare Accreditation.

Last updated 13 November 2008

Public

Professionals

No

Origin Gas

January 2009

Energy

Consumers

No

Sydney Buses

Last updated 4 March 2009

Transport

Consumers

No

Telstra

August 2008

Communications

Consumers

No

Tourism Alliance Victoria


Tourism

Professionals

No

Translink


Transport

Consumers

No

V-Line


Transport

Consumers

Yes

Wannon Water

1 July 2008

Water

Consumers

No

  

4.2. Common content

The service charters reviewed in this study were generally written in plain language and were very easy to understand. Some service charters provided a useful ‘one-stop’ source of relevant information about consumer rights, which were otherwise scattered across several websites – for example all of the service charters reviewed in this study contained clear contact information and useful information about how to complain.

There is no common template or guideline for service charters in Australia. This has resulted in a significant amount of inconsistency in the content of service charters – no particular consumer promise appears in more than 60% of charters. The following table summarises the most common elements included in Australian customer service charters:

Provision

Occurrence
(total is 30)

Notes

Manage complaints quickly

18

Ranges from 5-30 days, excludes complex matters

Respond quickly to inquiries

18

Ranges from 5-15 days

Promise to be courteous

14

Sometimes includes a promise to be friendly

Manage privacy

12


Provide accurate information

10

Sometimes includes provision of an accurate bill

Plain language information

10


Highly available

11

Sometimes includes promise of 24/7 availability

Treat customers fairly

9


Reliable supply / service / access

8

Often quite detailed (e.g. commit to <1% cancelled service)

Learn from feedback

7


Act professionally

7


 

The following table notes some provisions in service charters that only appear in a minority of charters. However these provisions are likely to be of considerable interest to consumers:

Provision

Occurrence
(total is 30)

Notes

Disability access

8


Translation services

7

Interpreter access / information in multiple languages

Safety

4


Penalties / compensation

3

Typically $30-$50 compensation for breach

Competitive fees

2

‘Competitive’ or ‘internationally competitive’ fees

Environment

2


It is important to note that the content of typical service charters might not be sufficient to address the types of complaints that are currently occurring in the communications sector. During the study the Telecommunications Industry Ombudsman (TIO) noted that they do not receive complaints from consumers regarding breaches of a customer service charter (despite five TIO members having service charters in place).

Instead, the TIO received complaints in the following categories:

Categories of Complaint Issues

2007/08

Customer Service

52,527

Billing & Payments

52,304

Faults

37,784

Contracts

30,391

Complaint Handling

28,821

Mobile Premium Services

22,391

Credit Management

17,241

Provisioning

12,937

Transfers and Churns

8,070

Privacy

3,171

Directories

1,080

Phonecards

906

Land access

821

Disability

174

Payphones

27

Total

268,645

  

4.3. Level of detail

The majority of customer service charters are only 1-2 pages in length, including pictures and logos. They typically include 5-6 ‘promises’, a section on complaints, a section on privacy and a section with contact details. Some service charters in the communications sector are less than 10 lines in total.

Most of the promises are very high level. A common example is that the organisation will promise to respond to inquiries ‘promptly’. No other details are provided so the consumer is left to interpret the meaning of promptly. In a subsequent dispute regarding delays, the service charter is unlikely to be of any assistance.

A small number of service charters provide a few extra details. However, the inclusion of extra detail does not always lead to an improvement for consumers. Some service charters set out very detailed targets, but the targets are in no way challenging or difficult to meet. Indeed, they are probably lower than the expectations of consumers dealing with a reasonable organisation. For example, consider the Bromley Council (UK) service charter target regarding emails:

When you e-mail us:
We will aim to send a full reply in less than 5 working days.
If the matter is urgent, we will respond faster.
We will make sure that our departmental e-mail boxes are checked at least once a day during working hours.[18]

If the Bromley service charter had simply promised a ‘prompt’ response, consumers may have actually expected a faster response than 5 days. Consumers may also expect that a dedicated customer inquiry email box is checked more than once a day.

In some rare cases the charters provided useful promises in sufficient detail to enable a consumer to make claims that are likely to be relevant to current consumer complaints. One notable charter in the communications sector is the AAPT Customer Charter,[19] which contained extremely detailed and helpful promises on many of the issues faced by telecommunications customers today. Examples include:

  • We will not demand payment of genuinely disputed amounts whilst a complaint is being investigated;
  • We'll tell you all relevant information before we suspend, restrict or disconnect you and we'll ensure that the way we tell you is clear and able to be understood by you; and
  • We'll review our decision to restrict or suspend without notice if you request it and if we have made a mistake we'll reconnect you without charge.

These promises compare favourably with more general promises to ‘be courteous’ that are common in other communications sector charters.

Overall, the study found that the majority of service charter promises fell into three categories:

  • High level promises with no detail (very common);
  • Detailed promises with exact targets (less common), but with the targets set at very low, unchallenging levels; or
  • Sector specific promises (rare, although common in the transport sector).

4.4. Compensation / remedies for breaches

There was surprisingly little coverage of compensation or remedies for breaches in the service charters reviewed in this study.

AAMI offer a small ($30) penalty payment for breaches of specific charter promises. AAMI notes that in the first ten years of operation the company paid more than 6,000 penalty payments to customers for breaches of its AAMI Customer Charter promises, totalling more than $200,000.[20]

V-Line offers complimentary travel tickets if they breach certain provisions of their service charter (at the complete discretion of the company).

Australia Post and the telecommunications and energy sector service charters all noted that compensation might be available to consumers for breaches of the legislated customer service guarantee, but they generally offered no additional compensation for breaches of the service charters. One organisation – CitiPower – offers double the legislated customer service guarantee, as a method of building consumer confidence.

One innovative remedy noted in the study was the promise by AAMI to pay a donation of $25,000 to an environmental charity if they breach Clause 18 of their service charter. This clause promises that ‘AAMI will report on its environmental initiatives annually, as it promises to reduce its carbon footprint’. So perhaps it is not a very difficult promise to keep.

In the absence of more widespread compensation arrangements and penalties it may be difficult for customer service charters to gain traction with either consumers or front-line staff.

4.5. Findings

Overall, the service charters appear to contain content that meets the marketing / branding needs of industry, with some minor benefits for consumers. If the service charters were written by consumers they would be very different. A brief examination of consumer driven charters reveals much higher standards and expectations – see for example the Draft Charter of Consumer Digital Rights (CHOICE[21]) and the Charter of Health Consumer Rights (Consumers Health Forum of Australia[22]).

Despite this, service charters do have some strengths:

  • Service charters are generally written in plain language and are easy to understand;
  • Service charters are very short and quick to read;
  • Some service charters provided a useful ‘one-stop’ source of relevant information about consumer rights;
  • There is a potential for service charters to have a positive impact or even lead to cultural change within an organisation;
  • Service charters contain clear contact information and useful information about how to complain; and
  • Some service charters (although only a small number) provide additional consumer rights and remedies that may not be available in other laws, regulations and codes.

The service charters examined in this study revealed the following weaknesses:

  • Many service charters consist entirely of high-level statements of principle or aspirations;
  • The majority of service charters lack any detailed promises or targets;
  • Where service charters do include detailed promises and targets the required standard is set very low, often well below the reasonable expectations of consumers;
  • The high-level promises and statements included in service charters are no different from statements contained in typical advertising and branding campaigns, and carry similar weight;
  • Service charters may not be attractive or accessible to younger consumers; they tend to have a traditional ‘old world’ appearance (sometimes including wax seals) and are not presented in a modern communication style. In an environment where younger consumers expect to be able to provide instant feedback on customer service (e.g. at sites like eBay and Whirlpool) the appeal of customer service charters may be limited;
  • Very few service charters include enforcement, sanctions or compensation arrangements;
  • Where sanctions and compensation arrangements are in place the remedies are set at extremely low levels; and
  • Service charters often lacked basic information about the scope and date of the charter – for example, it is difficult to distinguish between current charters and older or expired versions.

5. Implementation and governance of service charters

If customer service charters are to play an enhanced role in the communications sector in Australia, how will this be implemented? This section discusses some options for the potential implementation and governance of service charters. This should not be read as an endorsement of the use of customer service charters.

5.1. Implementation options

Will a single service charter be developed for the communications industry in Australia or will there be a template service charter for companies to adopt? Alternatively, organisations could be free to develop their own service charters in the hope that competition will result in improvements.

The following tables summarises some of the key advantages and disadvantages of each option:

Implementation Option

Advantages

Disadvantages

Voluntary 1
One charter per organisation, free to select content

  • Attractive to industry
  • Allows organisations to differentiate themselves from competitors
  • Allows innovation
  • Same as current arrangement, with very low take-up
  • Inconsistent content
  • No pressure to go further than legal requirements
  • Of little interest to consumers

Voluntary 2
One charter per organisation, must follow template

  • Provides consistency and certainty for consumers
  • Template may include key consumer protections
  • Industry will appreciate guidance / certainty provided by template
  • Stifles innovation
  • May lead to ‘lowest common denominator’
  • Requires restrictions on non-standard charters

Voluntary 3
One charter covers entire sector, signed by organisations

  • Provides consistency and certainty for consumers
  • Difficult to see how this is different from a code
  • Industry resistance to another layer of regulation, especially if there are overlaps / duplication

Mandatory 1
One charter per organisation, free to select content

  • Attractive to industry
  • Allows organisations to differentiate themselves from competitors
  • Allows innovation
  • Inconsistent content
  • No pressure to go further than legal requirements

Mandatory 2
One charter per organisation, must follow template

  • Provides consistency and certainty for consumers
  • Template may include key consumer protections
  • Industry will appreciate guidance / certainty provide by template
  • No innovation
  • May lead to ‘lowest common denominator’
  • Requires prohibition of non-standard charters, monitoring, enforcement etc.

Mandatory 3
One charter covers entire sector, all organisations deemed to subscribe

  • Provides consistency and certainty for consumers
  • Difficult to see how this is different from a law
  • Industry resistance to another layer of regulation, especially if there are overlaps / duplication

Any efforts to ‘strengthen’ customer service charters tend to result in them looking like codes of conduct. Indeed, it is difficult to distinguish between mandatory service charters and codes of conduct. This confusion / overlap between service charters and codes of conduct is a common theme in the discussion of service charters. The overlap is so significant that stakeholders often interchange the terms – see for example the Institute of Customer Service: Establishing a customer charter/ code of conduct.[23]

5.2. Governance

If customer service charters are to play an enhanced role in the communications sector in Australia, some governance and oversight may be required. There may be specific roles to be played by Government, the regulator (e.g. ACMA) and by industry associations (e.g. Communications Alliance). The exact governance model may depend on the selected implementation model (discussed above). It is important to note that the establishment of a governance and oversight mechanism may have a substantial impact on resources, and this may have a knock-on effect on other regulatory tools.

There is some limited guidance available on service charter governance issues from other sectors:

  • Oversight
    In 2000 Victorian public transport operators released customer service charters, overseen for a short period by a Customer Service Charter Committee that included community representatives.[24] Charters were the subject of regular reviews.
  • Charter guidelines
    The Victorian Essential Services Commission Customer Services Code contains requirements for mandatory customer service charters for water utilities.[25] The WA Economic Regulation Authority has also published Customer Service Charter Guidelines.[26] Both documents set out basic content requirements and guidance on the development and review of charters.
  • Charter reviews
    There has been a history of charters being subject to independent reviews, and methodologies are available for this task.

There is enough information and guidance available to develop a basic governance and oversight structure for customer service charters in the communications industry. Again, there will be considerable overlap / confusion with the governance and oversight structure for codes of conduct in the communications sector, as many of the issues (and players) are identical.

One key issue that may be difficult to resolve is that there is a considerable disconnect between consumer expectations of the content of service charters (as evidenced by the content of consumer-driven charters[27]) and business expectations of the content of service charters (as evidenced by examples of private sector charters in Australia). Key consumer issues such as affordability are not even mentioned in service charters. On this evidence the starting positions of the parties are a long way apart.

6. Recommendations

The project brief asks the researchers to deliver an opinion on the potential role of service charters, based on the findings of this research project.

The clear conclusion from this research is that customer service charters are not an appropriate regulatory option for the communications sector in Australia at this time.

The key reasons for this conclusion are:

  • Customer service charters compare unfavourably with other regulatory tools, in particular mandatory codes of conduct (for more detail, please refer to Section 2.2). Although codes of conduct have not been working effectively in the Australian communications sector in recent years, there are significant initiatives under way to improve the code development and approval process, and to invigorate code monitoring and enforcement. Those initiatives would appear to offer significantly more promise than diverting efforts to the development of service charters.
  • Voluntary stand alone service charters (one per organisation, with no template or guideline) have not proved useful to Australian consumers in the communications sector to date. EDR schemes do not appear to receive complaints based on charter breaches, the presence of a charter does not necessarily indicate good customer service, and there are very few current charters in the sector.
  • Industry and consumer interest in charters appears to have peaked in the late 1990s and then waned. The current profile of private sector customer service charters (both in Australia and overseas) is low. It may be difficult to re-invigorate the charter movement – skills and expertise in those areas has moved on to focus on the development of codes of conduct and other regulatory tools.
  • The content of customer service charters is inconsistent and very poor from a consumer perspective. It is unlikely that there is anything in a charter that would help to address current consumer issues in the communications sector. A large proportion of consumer complaints (e.g. to the TIO) involve product and service issues that fall outside the content of charters (for more detail, please refer to Section 4.2).
  • There is a considerable disconnect between consumer expectations of the content of service charters and business expectations of the content of service charters (as evidenced by examples of private sector charters in Australia). Key consumer issues such as affordability are not even mentioned in service charters.
  • For those consumer issues that might be covered by a charter (e.g. timely response to an inquiry) the content of charters is written at such a high-level that they are unlikely to provide any additional consumer rights. Where service charters merely restate existing requirements, their value is limited.
  • Service charters do not generally include arrangements for enforcement, sanctions, remedies or compensation. They will have little impact amongst organisations who are currently causing consumer concerns, unless backed up by considerable enforcement powers.

A major issue is that any efforts to ‘beef-up’ or strengthen service charters makes them look like codes of conduct. In Australia consumers and industry appear to be faced with a situation where efforts can be directed towards improving codes of conduct, or looking for alternatives. However, service charters are not an appropriate alternative. If codes were working effectively there would be little consumer interest in service charters in the communications sector.

More work is required to establish a regulatory framework that meets the needs of consumers in the communications sector – this work is beyond the scope of this current report. Further analysis of the a full range of regulatory options would be useful, including:

  • Consumer driven charters;
  • Laws;
  • Regulations;
  • Licence requirements;
  • Customer Service Guarantees;
  • Codes of conduct; and
  • Standards.

This report is not recommending any one of these approaches at this stage, it is simply noting that other regulatory options are available that will be more appropriate than customer service charters.

Where some individual communications organisations wish to offer a customer service charter, they should be encouraged to do so. There is some limited evidence that customer service charters can play a role in improving service culture within an organisation. However, service charters should not act as an alternative to other effective regulatory tools.

If organisations are seeking ideas for how service charters can be improved, this study has revealed a number of key lessons:

  • Service charters should include basic information on the scope and application of the charter promises, including clear information on the date of application of the charter;
  • Service charters are more useful to consumers where they contain a greater level of detail regarding key promises, rather than high-level aspirational promises;
  • Service charters could benefit from including more promises relating to disadvantaged consumers, and coverage of issues such as translation services and disability access;
  • Service charters stand out when they include promises relating to issues that really matter to consumers, such as competitive pricing, safety, the environment and sector-specific promises on the reliability of services; and
  • Service charters have the greatest impact when they include compensation or penalties for breaches of specific provisions.

[1] Economic Regulation Authority, Customer service charter guidelines, ERA Western Australia ,August 2006, <http://www.era.wa.gov.au/cproot/2518/2/Customer Service Charter Guidelines.pdf>.

[2] Australian Public Service Commission, The Australian experience of public sector reform, APSC Australian Government, Canberra, Last updated 3 July 2004, <http://www.apsc.gov.au/about/exppsreform10.htm>.

[3] Trans Atlantic Consumer Dialogue, Charter of Consumer Rights in the Digital World, TACD, London, March 2008, <http://tacd.org/index.php?option=com_docman&task=doc_download&gid=43&Itemid=40>.

[4] CHOICE, Choice campaigns for you: our campaign achievements, Sydney, 2008, <http://www.choice.com.au/viewArticle.aspx?id=102992&catId=100117&tid=100008&p=4&title=CHOICE+campaigns+for+you>

[5] Consumers Health Forum of Australia, Charter of health consumer rights, Canberra, 2007, <http://www.chf.org.au/public_resources/consumer_rights.asp>.

[6] Global Policy and Campaigns Unit, Consumer Charter for Global Business, Consumers International , London, October 2007, <http://www.consumersinternational.org/Shared_ASP_Files/UploadedFiles/F006711B-E230-42BB-B3D0-18B34E2311DD_Doc330.pdf>.

[7] CHOICE & Galexia, Consumer protection in the communication industry: moving to best practice, Sydney, May 2008, <http://www.galexia.com/public/research/articles/research_articles-sub03.html>.

[8] Department of Broadband, Communications and the Digital Economy, Review of consumer-related industry code processes, DBCDE Australian Government, Canberra, 2009, <http://agencysearch.australia.gov.au/search/click.cgi?rank=1&collection=agencies&component=0&docnum=1074302&url=http%3A%2F%2Fwww.dbcde.gov.au%2F__data%2Fassets%2Frtf_file%2F0003%2F111873%2FIssues_paper.rtf >.

[9] D Brewster, ‘Customer service is simpler - so why so rare?’, David Brewster – Clarity in words, Victoria, 20 November 2007, <http://www.davidbrewster.com/2007/11/20/customer-service-is-simple-so-why-so-rare/>.

[10] Public Sector Management Office, Developing customer service charters: a practical guide – improving customer service and quality in the WA public sector, Department of the Premier and Cabinet, Western Australia, June 1994, <http://www.dpc.wa.gov.au/PSMD/Publications/Documents/Organisational Performance Management/Non-Current - Developing Customer Service Charters.pdf>.

[11] P Batchelor (Minister for Transport), Putting the public back in public transport, media release, Department of Premier and Cabinet, Victoria, 26 May 2000, <http://www.dpc.vic.gov.au/domino/Web_Notes/MediaRelArc02.nsf/3a3fd087b7891fcc4a25688e00141c97/62ad3adcce5988554a2568ee00146260>.

[12]Local Government Focus, ‘Customer service charters bring positive results’, Australia’s National Local Government Newspaper Online, Victoria ,February 2003, <http://lgfocus.com.au/editions/2003/february/cuschart.shtml>.

[13] Australian Public Service Commission, op. cit.

[14] Essential Services Commission, Customer service code: metropolitan retail and regional water businesses, Melbourne, 25 June 2008, <http://www.esc.vic.gov.au/NR/rdonlyres/B58C15C5-5585-49E5-9BF3-EF88317394D8/0/CODAmendedUrbanCustomerCode20080710.pdf>.

[15] Economic Regulation Authority, op. cit.

[16] Australian Securities and Investments Commission, ASIC service charter: an ASIC better regulation initiative, Canberra, June 2006, <http://www.asic.gov.au/servicecharter>.

[17] S Conroy (Minister for Broadband Communications and the Digital Economy), Commsday summit, Department of Broadband, Communications and the Digital Economy, Swissotel Sydney, 31 March 2009, <http://www.atug.com.au/NBN/ConroyCommsDay.pdf>.

[18] London Borough of Bromley, Customer Service Charter, London, 2008, <http://www.bromley.gov.uk/NR/rdonlyres/9E0CDC2E-FCDD-4DFA-8184-2D9F21A1B69A/0/CustomerServicecharter2008.pdf>.

[19] AAPT, ‘Our customer charter’, Regulatory Compliance, Sydney, 2009, <http://www.aapt.com.au/Public-affairs#customer%20charter>.

[20] AAMI Coporate Communications, Customer charters should pay cash, not lip service, media release, AAMI, December 2005, <http://www.aami.com.au/Resources/File.aspx?id=101>.

[21] CHOICE, Choice campaigns for you, op. cit.

[22] Consumers Health Forum of Australia, op. cit.

[23] Institute of Customer Service, Establishing a customer charter/ code of conduct, Colchester, 1 January 2004,
<http://www.instituteofcustomerservice.com/KnowledgeDetails.aspx?KnowledgeBankID=60>.

[24] P Batchelor (Minister for Transport), op. cit.

[25] Essential Services Commission, op. cit.

[26] Economic Regulation Authority, op. cit.

[27] See especially the CTN Draft Australian Charter of Communication Rights, Consumers’ Telecommunication Network, Consumers’ telecommunication network position paper: digital economy future directions consultation, Sydney, March 2009, <http://www.dbcde.gov.au/__data/assets/word_doc/0016/112372/Consumers_Telecommunications_Network.doc>.