Although new financial hardship standards came into effect in 2024, customers are still reporting that simple requests for help are being rejected.
A Telecommunications Industry Ombudsman report published on Thursday, based on a review of more than 900 customer complaints, found some telcos were causing or adding to the financial stress of their customers.
Ombudsman Cynthia Gebert said the report confirmed that more needed to be done by companies to meet their obligations and support people struggling financially.
"We are seeing that telcos aren't consistently supporting consumers and that has a real impact on people's lives and their ability to stay afloat," she told AAP.
The report found some telcos even refused to help customers who proactively sought support, including a woman who fell into hardship after experiencing family violence and health complications.
She had purchased a device at a store and was talked into additional products but wasn't informed about any of the extra costs.
The woman was unable to pay for the extra services and was not offered any help from her telco.
The telco ended up selling her debt to a debt collection agency and listed a default on her credit file, which totalled $7000.
The cost was waived after she contacted the communications watchdog.
"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," Ms Gebert said.
About three-in-five Australians have experienced some form of financial difficulty, with 41 per cent experiencing high or chronic financial difficulty.
Telcos contacted by the communications watchdog indicated increased numbers of customers seeking financial support over the past year, due to ongoing cost-of-living pressures.
The report also found that customers prioritising their phone and internet bills over essentials like food or rent, fearing disconnection.
Many consumers also reported finding it difficult to initiate a conversation with their telco about financial hardship, with some feeling their telco was unsympathetic.
"Phone and internet are so critical to our ability to function in day-to-day society," Ms Gebert said.
"It's (how) you access government services, banking services … If you are disconnected, the wide ranging impacts on your ability to function are huge and it can compound."
The report's findings come after the introduction of new industry rules aimed at improving financial hardship support in March 2024.
The new rules require telcos to provide a minimum of six different options for assistance to customers, and to only disconnect consumers as a measure of last resort.
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