[LINK] SMH: ACMA and TIO Fail Utterly, Yet Again

[Roger Clarke]

[Great expose by Peter Moon and Ben Grubb.  Comments interspersed.]

Kogan Mobile's acceptable-use policy 'illegal'
Ben Grubb
Deputy technology editor
SMH
March 22, 2013
http://www.smh.com.au/digital-life/mobiles/kogan-mobiles-acceptableuse-policy-illegal-20130321-2gi9e.html

A prominent Australian telco lawyer has labelled as "plainly illegal" 
Kogan Mobile's acceptable-use policy, which the company has been 
using to disconnect heavy-use mobile customers.

The lawyer's comments come as Kogan said 0.2 per cent of customers 
had been affected by enforcement of the policy, which equates to 200 
of about 100,000 customers.

Peter Moon, of Cooper Mills Lawyers, reviewed Kogan's acceptable-use 
policy and said it was illegal and breached both the telco 
regulator's Telecommunications Consumer Protections code and 
Australian Consumer Law in multiple ways.

Mr Moon wrote about his concerns in two blog posts at 
http://tcpcode.com.au. The posts have since been deleted however, 
after Mr Moon accepted a request for their removal by a lawyer acting 
on behalf of Kogan. Despite this, he said on Thursday that he stood 
by his comments.

In a critique of the policies, Mr Moon questioned the use of 
"unlimited" when describing Kogan mobile plans, said the 
acceptable-use policy was "unclear and ambiguous" and criticised the 
fact it stated it could be changed at any time by posting a note on 
Kogan's website.

"This breaches the 'unfair contract terms' rules in the Australian 
Consumer Law," Mr Moon said. "The days when a telco could say to 
residential/personal customers, 'The deal is whatever we say it is 
from time to time', are long over."

Another telco lawyer, who did not want to be named for conflict 
reasons, backed up Mr Moon's comments, agreeing that Kogan had "some 
work to do to bring their documents and advertising into legal 
compliance".

[It seems that 'conflicted' lawyers aren't concerned about actual 
breaches of the law, just about 'documents' and 'advertising'.]

Customers Kogan has been telling to leave its network were told they 
were making too many calls, sending too many texts or using too much 
data in a certain period on its prepaid "unlimited" call/text plans 
with either 2GB or 6GB of data.

In recent years the Australian Competition and Consumer Commission 
has cracked down on use of "unlimited", but said in relation to Kogan 
that it did not "ordinarily comment" on whether specific issues or 
businesses were being investigated. As recent as this month, the 
commission also cracked down on telcos, including Telstra and TPG, 
using unfair contract terms.

The Telecommunications Industry Ombudsman said it had "received a 
small number of complaints" from Kogan consumers but could not give 
the total number until May, when it releases its quarterly statistics.

[More pseudo-regulatory gutlessness?  Oh, sorry, they've got it under 
control, and would prefer that the natives weren't too restless in 
the meantime.  Silly me for not being able to tell the difference.]

A Kogan spokesman said the company's terms and conditions, including 
its acceptable-use policy, were drafted and prepared by Gilbert + 
Tobin Lawyers, who were "widely regarded as one of the leading 
telecommunications law firms in Australia ... also used by Telstra".

[ ... who also breached the law recently, by following the same advice?]

Another part of the policy Mr Moon said breached Australian Consumer 
Law, as well as the telco industry's code, was Kogan claiming it 
could terminate any of its customers without warning.

The lawyer also labelled Kogan's Critical Information Summary as 
having "a long list of defects". The one-to-two page CIS is required 
as of March 1 under the Telecommunications Consumer Protections code 
to be displayed at point of sale and is meant to provide information 
on what is included in a plan.

Mr Moon said the Kogan CIS was severely lacking in the detail 
required as part of the code.

On Wednesday, Fairfax Media reported that Kogan did not have a CIS. A 
Kogan spokesman later contacted Fairfax to say it did have one, and 
referred Fairfax to the URL koganmobile.com.au/plans, which has the 
phrase "critical information summary" on it.

But the phrase is not displayed at kogan.com/au/mobile, which is the 
first URL that appears in a Google search for Kogan Mobile.

Mr Moon said that where the CIS was displayed, it failed to list the 
Telecommunications Industry Ombudsman's contact details, as required 
by the code. It also did not prominently state as a single figure the 
total buy price of each plan, and did not list the minimum or maximum 
monthly charge payable under each product's offer.

Further, Mr Moon said it failed to disclose the acceptable-use 
policy's existence, as well as Kogan's clause that those who ran a 
business could not use the company's service.

Summarising, the lawyer said Kogan's CIS was "so wide of the mark" 
from adhering to the telco code that it was "more likely to breach 
the Australian Consumer Law's anti-misleading conduct requirements".

Australia's communications regulator, the Australian Communications 
and Media Authority, would not comment on Kogan directly, but said it 
had identified and written to 38 telcos who did not appear to be 
complying with CIS requirements.

[Um, they're in breach of the law.  When I drive too quickly, I get 
booked.  What's the difference?  Ah, regulatory gutlessness.  Silly 
me again.  ACMA has a long record of this nature.]

Compliance with the requirements from the telco industry as a whole 
had been "less satisfactory than compliance with the earlier code 
rules", said ACMA consumer interests manager Alan Chalmers.

Mr Chalmers reminded telcos that they needed "to be very careful with 
the way they use terms such as 'unlimited' when they have 
acceptable-use policies where there are limits to usage".

[Now let me think this through.  This is the fearless consumer 
interests person, within the fearless regulator.  And he uses "less 
satisfactory compliance' and "be very careful".  You're a gutless 
wonder amongst gutless wonders Mr Chalmers.  Are you a public 
servant, by any chance?]

If a telco was non-compliant with the code, ACMA could issue a formal 
warning, which directs it to comply with the code, he said. ACMA 
could also issue infringement notices or start court action.


-- 
Roger Clarke                                 http://www.rogerclarke.com/

Xamax Consultancy Pty Ltd      78 Sidaway St, Chapman ACT 2611 AUSTRALIA
                    Tel: +61 2 6288 1472, and 6288 6916
mailto:Roger.Clarke at xamax.com.au                http://www.xamax.com.au/

Visiting Professor in the Faculty of Law               University of NSW
Visiting Professor in Computer Science    Australian National University