Telco sales staff will be required to run credit and income checks on any new customers buying a new plan worth more than $45 a month, under changes to the industry's code of practice.

The communications regulator has vowed to penalise companies who breach the new rules, but consumer groups say the changes do not go far enough to protect consumers from predatory behaviour.

Key points: The code of practice is decided by the telecommunications industry, and regulated by ACMA

The code of practice is decided by the telecommunications industry, and regulated by ACMA Consumer groups say customers are still at the mercy of telcos' high-pressure sales tactics

Consumer groups say customers are still at the mercy of telcos' high-pressure sales tactics The ACCC is investigating Telstra over concerns vulnerable customers were sold plans they could not afford

Under the new rules, sales staff will be required to run external checks before offering plans worth more than $1,000 to new customers and customers who previously had a pre-paid phone.

John Stanton, chief executive of telecommunications industry group Communications Alliance, said the new rules represented a "major strengthening" of the code.

"They put a requirement on providers … that they do a full credit assessment to make sure that the customer is in a position to meet the financial commitment," he said.

"They need to understand and obtain details from a customer as to how they will be able to afford the commitment."

But consumer groups criticised the new code for not going far enough to protect consumers from predatory sales pitches.

The Australian Communications Consumer Action Network said the new regulations still put the responsibility on customers — who are often subjected to high-pressure sales tactics — to know what plan they could afford.

"We know that vulnerable consumers are more likely to be taken advantage of by high-pressure sales staff," ACCAN chief executive Teresa Corbin said in a statement.

"However, the knowledge gap between the average customer and telco team members means that we're often relying on their advice as to what we should buy and how much to spend."

Gerard Brody, from the Consumer Action Law Centre, said telcos should be treated like banks.

"The checks that are required are only really looking at one side of the ledger, where your income is coming from, not your overall financial position," he said.

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"The reality is that expensive post-paid telco products are just like loans, which means people can end up with really high debts, we regulate loans so that they have to assess whether repayments are affordable and there's no reason why telcos shouldn't be required to comply with those same standards."

Mr Stanton disputed the comparison.

"This is not a home loan that's being provided and the external credit assessment does provide a sense of whether the person is behaving responsibility and living within their means," he said.

"Looking at their capacity to meet the monthly bill, I think gets us to a reasonable level of assurance around making sure that customers don't end up in positions of difficulty."

Mis-selling of phone contracts 'rife'

The Telecommunications Consumer Protections (TCP) code is enforceable by the Australian Communications and Media Authority (ACMA) and companies can be taken to court and fined millions of dollars for repeatedly breaching it.

ACMA chair Nerida O'Loughlin said the authority would be watching telcos closely, after evidence of customers being encouraged to sign up to multiple plans emerged.

"The new TCP code puts the onus on telcos to ensure customers understand what they are buying," she said.

"We will be subjecting telcos to close scrutiny as to how well their practices conform with the new code."

The new rules, which are revised every five years, follow the national consumer watchdog launching an investigation into Telstra's sales practices, amid mounting reports that vulnerable Indigenous Australians are being sold plans they are unable to afford.

Financial counsellors said the mis-selling of phone contracts was "rife" and the ABC heard of dozens of examples across Australia of Telstra customers on Centrelink benefits being sold contracts costing as much as $250 a month.

Caitlyn Roe was one of many Aboriginal people in the Kimberley who were sold plans they could not afford. ( ABC News: Amy Bainbridge. )

Carolyn Cartwright from MoneyMob Talkabout — an organisation offering financial advice to Aboriginal people — said they had noted hundreds of thousands of dollars in telco debt.

"In the last 18 months, we have documented over $700,000 worth of telco debt in remote Indigenous communities, and there is a commonly occurring pattern of sales involving multiple premium devices and add-ons such as speakers or headphones," she said.

"Very often, these consumers have little understanding of the implications of the contracts they are signing."

But Mr Stanton said he did not believe the problem of mis-selling was endemic and said the current system of regulation developed by industry was serving the industry well.

"The system as it stands has checks, balances and penalties in it, that can address these sorts of situations, rare as they are," he said.

"There's no system that will guarantee that something can never go wrong … the point is to make sure that if there is a problem you can detect it quickly and correct it quickly."

How much do you pay for your phone plan?

Hsu: Optus, $35 a month (no phone)

Hsu, 29, is on a $35 a month plan with Optus. ( ABC News: Amy Bainbridge )

"I'm using an iPhone 10. It was quite reasonable, before I used the pre-paid but I got only four gigabyte, so that's not enough. This is 30 gigabyte, that's the main reason I decided on post-paid rather than pre-paid."

Jack: Telstra, $100 a month

Jack from Yarrawonga pays $100 a month with Telstra. ( ABC News: Amy Bainbridge )

"I'm with Telstra business. It could be better for what I get, for data and that, but other service providers aren't an option for us because we live in the country. I've got an iPhone X, because it really frustrates me when it goes slow and the battery life goes down. I'm pretty happy with the service, but I'm paying probably a bit too much."

Sho: Kogan, $16 a month (no phone)

Sho, 22, pays $16 a month for his mobile phone plan with Kogan. ( ABC News: Amy Bainbridge )

"I spend $16 a month with a 20 gig data and unlimited call and text, so it's good. I bought it online with a friend, so it was like buy one get one free. I pay $200 for the whole year. I have an iPhone XS max — I bought this three days ago."

James: Optus, $130 a month

James, 25, is on a $130 a month plan with Optus. ( ABC News: Amy Bainbridge )