TIO: Telcos Failing to Support Customers in Financial Strife
In today’s digital world, phone and internet access are essential. From contacting loved ones and working remotely, to accessing education, healthcare, emergency services and government support, connectivity is central to everyday life.
Yet, for many Australians, financial hardship is making it harder to stay connected.
A new report from the nation's Telecommunications Industry Ombudsman (TIO) finds telcos are failing to consistently support customers in financial hardship and, in some cases, unintentionally causing or making financial stress worse.
The report, Keeping connected: Experiences of telco consumers in financial hardship, reveals the challenges faced by customers struggling with telco bills.
The findings highlight a rise in complaints, systemic issues with provider responses and an urgent need for telcos to improve their support for vulnerable customers.
Access to phone and internet service should never be a luxury; it is an essential service that is vital to our everyday life. The consequences of losing access to your phone and internet can be serious; it can lead to people losing work and being unable to access critical support. From there, things can continue to spiral. Losing income and support services can compromise people’s food security, safety and health.
Financial hardship widespread and 'hiding'
TIO’s report makes it clear that financial hardship is common, with more than three-quarters (76%) of Australians experiencing some form of financial or personal difficulty.
Between April 2024 and March 2025, the TIO almost 2,000 complaints specifically about financial hardship – a significant increase compared to previous years. These complaints reflect only a fraction of the true scale, as many people do not report issues.
Hardship-related complaints surged by 87.6% in Q2 FY25 and 73.4% in Q3 FY25 compared to the same periods in the previous year.
The majority of these complaints relate to mobile services.
As mobile connectivity becomes essential for tasks like multi-factor authentication and remote work, any disruption can significantly impact consumers’ lives.
“People may be just managing their basic living expenses, like food, rent and petrol, and be one unexpected phone bill or life event away from falling into hardship," says Cynthia. "It’s at these critical moments that accessing the support you’re entitled to from your telco is more important than ever – so you can manage your bills and stay connected."
New industry standards
To address mounting concerns, the Australian Communications and Media Authority (ACMA) introduced a new industry standard in March 2024.
It mandates that telcos provide a minimum of six payment assistance options and only disconnect consumers as a last resort.
However, the TIO’s review of more than 900 complaints shows that many telcos are still falling short, with consumers reporting being denied basic support such as short-term payment extensions or flexible plans. Some are required to provide burdensome documentation or are prematurely referred to debt collectors, sometimes even while existing payment arrangements are in place.
In some cases, customers are disconnected from services despite actively seeking help.
Other common issues faced by customers include:
- Direct debits processed on the wrong date
- Unexpected high charges
- Refusals to assist until a payment is already missed
- Mis-selling of products or services that consumers cannot afford
“Insights captured in this report confirm telcos need to do more to meet their obligations and support people struggling financially, or they risk being part of the problem and causing further harm to people who are already at risk,” adds Cynthia.
Creating a culture of support
The TIO’s report emphasises the importance of creating a culture in which consumers feel safe and supported when asking for help.
Often, consumers are made to feel ashamed or are bounced between departments, repeating their stories without resolution. Some spend hours on hold or never receive promised call-backs.
The case study of ParrotTel highlighted in the report demonstrates that change is possible. After a spike in complaints, the provider increased hardship team resourcing, optimised call-back systems and empowered frontline staff to offer flexible support.
As a result, its complaint numbers dropped significantly.
“What we’re hearing from consumers about financial hardship is likely just the tip of the iceberg," continues Cynthia.
"We want people to feel confident that when they reach out to their telco for the help they are entitled to, they’ll get the support they need that is right for their circumstances. This isn’t optional; the rules are clear that telcos must do this."
Recommended approach for telcos
The report outlines three core recommendations for telcos to provide greater support:
- Telcos must understand, recognise and respond to financial hardship and treat consumers seeking help with empathy and respect.
- Telcos need to review their practices and processes to ensure that they are complying with their obligations to help consumers in financial hardship.
- Telcos should proactively identify and address the ways their actions may contribute to consumer financial hardship.
The ACMA has already issued formal warnings to four telcos for non-compliance and will soon release further guidance.
Meanwhile, industry-led initiatives such as the Telco Accessibility Taskforce and Enhanced Care Dialogue show a willingness to improve, but more will be needed to translate policy into practice.
“Telcos need to actively rebuild trust with their consumers and prioritise protecting consumers who are experiencing, or at risk of, financial hardship," concludes Cynthia. "We urge telcos to embed the flexibility and understanding that must be part of the way you do business when you provide an essential service to the community."