The Australian Competition and Consumer Commission has reached a resolution with Telstra after an investigation into representations by Telstra to consumers who complained about faulty mobile phones.

The ACCC was concerned that, on some occasions, Telstra may have misled consumers about their consumer guarantee rights in relation to faulty mobile phones. Telstra’s representations may have caused some consumers to believe that they were not entitled to a refund, replacement or repair, when these remedies may have been available under the Australian Consumer Law (ACL).

Although Telstra has ACL compliance programs in place, the ACCC was concerned that some staff may not have fully appreciated that consumer guarantees are in addition to Telstra’s policies and manufacturers’ warranties.

For example, complaints to the ACCC raised concerns that individual Telstra staff may have made representations to the effect that:

consumers were not entitled to any remedy outside the manufacturer’s warranty period

consumers were not entitled to a refund or replacement, where the mobile phone was returned to a Telstra store later than a specified time from the date of purchase

consumers were not entitled to a replacement unless the mobile phone had already been repaired 3 times.

“This investigation highlights the importance of businesses educating their staff, and consumers, that consumer guarantee rights are in addition to the business’s own policies and any voluntary warranties,” ACCC Deputy Chair Dr Michael Schaper said.

“Customers rely upon the statements that salespeople make in-store which is why these statements cannot mislead consumers without breaching consumer law. All businesses should ensure that their staff training programmes explain a business’s obligations under the Consumer Law.”

The ACCC identified around 400 complaints, from around Australia, made during the period 1 January 2011 to 4 November 2013 that raised concerns over possible misrepresentations about consumers’ rights under the consumer guarantee provisions of the ACL. The majority of these complaints related to mobile phones.

Telstra has acknowledged the ACCC’s concerns.

“Telstra has worked with the ACCC to address its concerns and has committed to various measures to improve the experience of its customers and to continue to improve its compliance with the ACL,” Dr Schaper said.

Telstra’s commitments include:

providing induction and, at least, annual consumer guarantees training for relevant Telstra staff, including guidance on how to deal with common customer scenarios when managing faulty mobile phone returns

conducting annual independent assessments of relevant Telstra staff’s awareness of consumer guarantee rights when returning faulty products, including random sampling of a number of Telstra owned and licensee retail stores and hundreds of contact centre staff who are likely to manage customer interactions or questions about faulty products

maintaining a consumer guarantees web page for consumers, which will include information about the consumer guarantees regime and how consumer guarantees interact with Telstra’s policies and products

maintaining in-store information for consumers about their consumer guarantee rights in relation to faulty products with helpful signs at service desks.

“The ACCC encourages all businesses to consider whether their ACL compliance measures may be improved to ensure that consumers are not misled about their important consumer guarantee rights,” Dr Schaper said.

Telstra began implementing its commitments in stages from September this year.

The ACCC has previously achieved a number of positive outcomes in relation to consumer rights and mobile phones. For example:

Telstra takes steps to strengthen warranties - Following discussions with the ACCC, Telstra decided to roll out 24 month warranties for mobile phones supplied with 24 month service contracts (excluding Apple products). Telstra already offered 24 month warranties for mobile phones manufactured by BlackBerry, HTC and ZTE.

Apple Australia gives undertaking to improve its consumer guarantees policies and practices - Following an ACCC investigation, the ACCC accepted a court enforceable undertaking from Apple Pty Ltd (Apple). The undertaking included an acknowledgment by Apple that, without limiting consumers’ rights, it will provide its own remedies equivalent to those remedies in the consumer guarantee provisions of the ACL at any time within 24 months of the date of purchase.

For further information, see consumer guarantees.