Mediation does not go far enough to settle telco disputes

A new law is being proposed to empower the authorities to force telcos to resolve consumer disputes via mediation.

The Ministry of Communications and Information (MCI) mooted the law in consultation documents released last Friday .

The consultation ends at noon on Aug 24.

Its objective is to pave the way for a new Alternative Dispute Resolution (ADR) scheme under which customers pay a small fee to resolve their billing, contract, service quality and compensation disputes.

Such issues could be over the thousands of dollars that customers unknowingly chalked up in roaming fees. Or they could be over unexplained mobile data charges.

Merely replicating what SMC and Case currently offer is not good enough.

The ADR scheme could well be a boon to consumers in the long run. At the moment, though, it is unclear how it improves on the current avenues for dispute settlement.

Consumers can already turn to the Singapore Mediation Centre (SMC) and its more than 400 mediators, and also consumer watchdog Consumers Association of Singapore (Case) - both for a fee.

The ADR scheme may eventually be run by either the SMC or Case, as MCI said it will appoint a third party.

It is also not clear what triggered the move; the number of complaints has stayed the same.

The volume of complaints over mobile phone, broadband and pay-TV billing and contract issues received by the Infocomm Development Authority (IDA) and the Media Development Authority (MDA) has hovered at about 340 every year over the past three years.

One of the benefits of having such a scheme is that the IDA and MDA would have a dedicated avenue to channel complaints.

Plus telcos would be forced to sit at the negotiation table. As Case executive director Seah Seng Choon pointed out, telcos have on many occasions turned down consumers' request to participate in mediation.

Even so, merely replicating what SMC and Case currently offer is not good enough.

Telcos and consumers could still walk away from a long-drawn mediation without resolving their disputes.

The system is also open to abuse, as difficult customers could wear everybody out with unreasonable demands that even the Small Claims Tribunal would throw out.

These gaps must be plugged, and the methods must be fair to both parties.

One way of plugging the gap is to provide adjudication, which MCI said it would consider.

The Financial Industry Disputes Resolution Centre (Fidrec), which resolves customer disputes with financial institutions, offers adjudication when a dispute is not settled by mediation. The case is heard by an adjudicator or a panel. The decision is final and binding on the financial institution.

I would argue that consumers should be bound by the decision too, so as to weed out those with unreasonable demands.

After all, consumers will likely pay significantly less than their service providers when seeking adjudication.

In the case of Fidrec, consumers pay $50 when their cases proceed for adjudication, whereas the financial institutions pay more - $500.

A version of this article appeared in the print edition of The Straits Times on August 10, 2016, with the headline 'Mediation does not go far enough to settle telco disputes'. Print Edition | Subscribe