Record Or Refund

It is a pretty standard idea in accounting that businesses should keep records of all their sales. That way, if somebody complains that they were invoiced for something they did not want, did not order, or did not receive, the records should clarify who is right and who is wrong. One of the eccentricities of telcos is that they are sometimes very poor at keeping such records. The upshot is that more than one customer has used this to exploit telcos who cannot justify their invoices, and more than one business has used this to try to mis-sell services to customers. When regulators get involved, they tend to worry more about mis-selling than the dishonesty of a small proportion of customers. For this reason, efficient and comprehensive record keeping is vital for telcos. It enables them to substantiate their invoices, rigorously chase payment, and not be distracted by false accusations of mis-selling or over-billing. At the same time, it helps them with having good relations with regulators. The easier it is for a regulator to check that invoices are supported by genuine records of sales, the less likely they will be to press the telco to appease complaining customers. This has been demonstrated once again in India, where the regulator, TRAI, has demanded that Idea Cellular refunds charges to customers. Idea was unable to show any records that the customers had consented to purchase the services, leaving TRAI with little option but to direct Idea to refund any charges that were disputed by customers. As the news spreads, Idea is likely to find itself dealing with an increasing number of complainants demanding their money back. They will have no option but to concede the complaint, even if the complaint is bogus and the customer is taking advantage of the TRAI ruling. That is the risk telcos take whenever they keep inadequate records.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.