Budget debate: Cheaper, faster option for consumers to force telcos to settle disputes

SINGAPORE - From next month (April), consumers and small businesses unable to settle disputes with their telcos will be able to finally do so without going to court.

Called the Alternative Dispute Resolution (ADR) Scheme, this option is designed to address long-drawn disputes between customers and telecommunication and media service providers. Although rare, prolonged and complex cases can span more than three to four months.

Consumers and small businesses might also not have the means to resolve disputes with much larger companies, as they may have less bargaining power and the telcos may not accede.

The scheme's April launch was announced by Minister for Communications and Information Josephine Teo on Friday (March 4).

Speaking on the debate on her ministry's budget, Mrs Teo said that when a case is brought to ADR, it will be mandatory for service providers to participate in the resolution process.

Developed by the Infocomm Media Development Authority (IMDA) and the Singapore Mediation Centre, disputes can now be settled in at most 2.5 months with ADR.

It was initially expected to launch around end-2018.

IMDA explained that the implementation details of the ADR took some time to be worked out, due to the multiple parties and complexities involved.

The authority said that, on average, it received around 2,500 telco-related complaints a year from 2017 to last year.

Between 2020 and 2021, there were about 270 cases that took more than 30 days to resolve or close.

Last year, IMDA received the most complaints on billing matters – such as disputes over charges and waiver requests – and operators’ quality of service, including customer service.

Under ADR, service providers bear 50 per cent to 90 per cent of the fees for the dispute resolution. Consumers pay the remaining amount, which ranges from as low as $10 to $375. This is lower or comparable to other dispute resolution options.

If the dispute had gone to court instead of through ADR, the legal fees could be much higher, since lawyers can charge hundreds of dollars on an hourly basis.

ADR covers disputes and issues such as those related to billing, contracts and unsolicited charges like fees for excess data and value-added services.

The services that can be looked into by ADR include: mobile services, such as those for voice, data and SMS; fibre broadband services; and pay-TV services.

Services that are less frequently used or not licensed by IMDA are not covered by ADR. This means that app store purchases, as well as streaming services like Spotify and Netflix, are excluded.

The scheme also does not cover issues such as those related to regulatory policies, legal actions and commercial decisions by a service provider, like the pricing of its services and the range of services offered, such as how it prices mobile plans.

IMDA added that frivolous cases will not be covered by the scheme. If cases have already been handled or closed by ADR before, they cannot be submitted for ADR again.

For disagreements to be eligible for ADR, the dispute value should be $10,000 or less, and the dispute must have happened in the past one year.

Once a case is submitted for ADR, the service provider is given a 14-day notice period to try and negotiate with the consumer and resolve the dispute.

If that does not work out, the parties go into mediation, which the consumer has to pay $10 for and the service provider $90. The mediation process, including the 14-day period, is expected to take around one to 1.5 months.

If mediation still does not work, a determination process kicks in that consumers pay $225 for, while the service provider pays $525. This could add another one to 1.5 months for the dispute to be resolved.

The whole ADR process is estimated to take around 2.5 months at the most.

After the 14-day notice period, a consumer or small business can request direct determination and skip mediation.

The Singapore Mediation Centre appoints the relevant facilitator or referee for the processes. The decision made under the determination process is binding on both telcos and consumers or small businesses.

A consumer who does not accept the ADR decision can still turn to the courts or the Small Claims Tribunal.

ADR supplements existing complaint channels and is not meant to replace them. Consumers should still try to resolve disagreements with their service providers directly first. Other avenues available include raising the matter to IMDA or the Consumers Association of Singapore.

Some telcos previously said that ADR was not necessary as it appeared to duplicate existing dispute resolution channels.

IMDA said that the key difference between existing channels and ADR is that the operators must participate in the latter. Another difference is that the way the ADR’s fees are distributed between the parties involved helps “reduce the disparity in bargaining power between customers and operators”. 

“With this, it is envisaged that the ADR scheme would incentivise an improvement in operators’ handling of complaints from customers,” said the authority.

When contacted, telcos Singtel and StarHub said they were looking into the impact of IMDA’s decision.

Singtel, Singapore’s largest telco, said it was reviewing the ADR’s “implications to our already holistic customer support structure”, adding that 99 per cent of its customer disputes are resolved within 14 working days. 

StarHub welcomed IMDA’s ADR and cited an annual study by the Singapore Management University showing that the telco was tops in customer satisfaction for broadband and mobile services last year.

M1 said it will work with IMDA to improve its customer experience and journey, and that it strives for a quick and complete resolution for customer complaints.

IMDA also said that it will be publishing on its website data on consumer telco complaints and how well telcos handle complaints. Pay-TV figures will not be included.

Telcos with a significant subscriber base, of 20,000 or more, must disclose to IMDA the number of complaints, the time it took to resolve complaints and the average hotline and live chat waiting time.

This is "to enable consumers to make more informed choices when signing up for a service provider", said the authority, adding that it hopes publishing the data will "encourage service providers to deliver a better service experience to consumers as a business differentiator".

The first report is expected by first half of this year. Future reports will be published quarterly.