The need to establish an official Tolling Ombudsman service
As the toll road industry is fraught with a myriad of complaints, it is no wonder implementing an Ombudsman service was necessary to manage the arbitration process.
However, the implementation of the Tolling Customer Ombudsman (TCO) service and the legitimacy of its current operation have raised concerns, and further points to a problematic system in need of review.
Related Content: Transurban - A Case for a Senate Inquiry - 31 August 2016
TCO Michael Arnold has been the lead Ombudsman of the service since it's inception in 2004. Over the past 12 years, Mr Arnold did not believe it "appropriate or necessary" to have the TCO become a member of the Australia New Zealand Ombudsman Association (ANZOA), which is Australia’s peak body of Ombudsmen.
"The existing ombudsman [of ANZOA] were in the main, either statutory bodies or industry dispute resolution bodies for companies in the financial sector with different corporate structures from the TCO," Mr Arnold said.
In a publication written by ANZOA, they reference concern about "Ombudsman" bodies that do not conform to the accepted model and are inappropriately described as an Ombudsman office.
"Our view is that a body should not be described as an Ombudsman unless it complies with six essential criteria addressing independence, jurisdiction, powers, accessibility, procedural fairness and accountability," the policy statement reads.
As the TCO is not responsible to an independent board of industry and consumer representatives and Mr Arnold said the TCO is "not a not-for-profit" (as it operates under Lorimax Pty Ltd – a business that Mr Arnold is a director of), it appears the TCO would not meet Independence and Accountability criteria.
If Australia's peak body of Ombudsmen would not describe the TCO as a legitimate Ombudsman, how can toll road customers be expected to blindly trust this service for a fair outcome?
Further to missing key criteria of ANZOA's policy statement, the implementation and history of the TCO raise pertinent questions about the agenda behind the TCO service and its independence.
Mr Arnold told The Scandal that toll road operators choose to become part of the TCO system, perhaps a suggestion that there is no hidden agenda.
"It should be emphasized that all of these toll operators became part of the TCO system when there was no regulatory obligation to do so," Mr Arnold said.
However, according to the TCO's September 2012 - February 2013 Review, the TCO came to fruition as a result of Transurban's spokesperson Jean Ker Walsh, who was a "driving force" in its establishment. Ms Walsh also previously worked as a spin-doctor for a former Victorian Premier.
It would appear that although Mr Arnold is correct in saying there is no regulatory obligation for Transurban to become a member of the TCO system, Transurban was actually the creator of the TCO system.
The agenda behind creating the TCO service is clear, given it was 'driven' by someone whose job it is to be concerned with media and public image, rather than with disaffected customers experiencing poor service and suffering at the hands of the toll road operator.
Add to this that the TCO website is owned by Transurban, it is easy to cast doubt over Mr Arnold's claims of independence. Transurban is listed as the Domain Registrant, while the Registrant is Kirsten Llewellyn, formerly Transurban's senior legal counsel and currently their assistant company secretary.
In addressing this issue, Mr Arnold said the TCO website was being transitioned to the TCO – eight years after it was registered - and maintained he is independent of Transurban.
One would think if the TCO was truly independent of Transurban, their publications might provide more critical discussion and informative data. In fact, the TCO's six-monthly reviews provide minimal detail that is hard to follow and understand.
Mr Arnold said the TCO had a "counterbalancing process" where issues are discussed in the six-monthly reviews, so that toll road customers, operators and State Governments were aware of the issues.
Albeit this 'discussion' is pale in comparison to other Ombudsman reports in similar industries, it is important that stakeholders are at least informed of issues.
However, it is even more critical that any and all data that could point toward identifying the overarching cause of the problem be made publicly available. And it would seem that the TCO does not publish semantic and critical data on toll road complaints to ensure stakeholders are able to identify the root of the problem.
When asked whether the go via network in Queensland received more complaints since being acquired by Transurban, Mr Arnold said, "I have not distilled the complaints in respect to go via to determine if they are in relation to recent events or they are legacies from the time before it was acquired by Transurban."
However, an industry whistleblower told The Scandal that complaints from customers substantially increased when acquired by Transurban.
The operation of the TCO service is also quite bizarre. The TCO does not have a dedicated fax machine, and instead uses the one at the Hawthorn Post Office.
Mr Arnold said this was because the vast majority of complaints were received by email. Perhaps a redundant point, given that a staff member was still required to check the post office every day for faxes.
If a customer wishes to call the TCO, a 1800 number is supplied but operating hours are not referenced on the website. The TCO also does not publish an office address online and when asked for it by customers, does not usually provide it.
"Appointments can be made in the States of Victoria, New South Wales and Queensland, if it is found any toll road customer cannot lodge a complaint online, by email or fax or by way of telephone. There has never been such an instance to date," Mr Arnold said.
One of the main issues in relation to disputes about tolls and fees in in [sic] Queensland lay in the escalation process of unpaid tolls to the Department of Transport and subsequently SPER [State Penalties Enforcement Registry] that was required by Queensland legislation.Michael Arnold
The TCO is also restricted in its power and abilities. A big hindrance is the inability to interfere in State escalation, despite it being a top complaint by toll road users.
"One of the main issues in relation to disputes about tolls and fees in in [sic] Queensland lay in the escalation process of unpaid tolls to the Department of Transport and subsequently SPER [State Penalties Enforcement Registry] that was required by Queensland legislation," Mr Arnold said.
A flawed Ombudsman service suits the State, and this reflects their lack of interest in an overhaul of the entire tolling system. A regulated Ombudsman with powers to pause unpaid toll escalation could see dramatic reductions in state revenue.
Throughout this investigation, toll road customers have referred to Mr Arnold's communication as incoherent with bad grammar or confusing punctuation. This also raises questions over Mr Arnold’s competence in performing the role of the Ombudsman.
Mr Arnold mistakenly attached a bank statement of Lorimax Pty Ltd to an email response to The Scandal. Earlier, a person unknown to Mr Arnold was copied in on an email. Throughout the entire communication, there were contradictory statements made as a result of omitting crucial words, and bad grammar made it difficult to comprehend some sentences.
The Scandal appreciates Mr Arnold's engagement in answering the questions, and perhaps it's indicative of a service that is understaffed, but given thousands of toll road customers rely on Mr Arnold to mediate their complaint, a review into the TCO's practices and abilities needs to be conducted.
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5 things you didn't know about Transurban
Illegal Political Donations
In 2008 the Washington Post wrote that Transurban gave $172k to 90 campaigns in Virginia USA over 3 years. They admitted to making illegal donations and subsequently asked the politicians to return the money. Transurban currently operate 2 toll roads in Virginia.
26,000 Lawsuits Filed Against US Drivers in 2014
Fox 5 writes that Transurban filed 26,000 lawsuits against drivers in 2014 alone. Transurban lost cases for exceeding the statute of limitations, and have been caught using "non-lawyers" to represent them. A judge ruled "non-lawyers" could not and cannot represent Transurban, however they still engage them to negotiate court settlements.
Tolling 'Ombudsman' Website Owned by Transurban
The 'independent' Tolling Customer Ombudsman (TCO) website is owned by Transurban. Transurban is listed as the Domain Registrant, while the Registrant is Kirsten Llewellyn, formerly Transurban's senior legal counsel and currently their assistant company secretary.
Transurban CEO on Board of Roads Australia
Scott Charlton sits on the Board of Roads Australia - the peak body of road transport stakeholders. Joining him are the heads of Government departments - John Merritt (VicRoads), Peter Duncan (Roads and Maritime Service), and Neil Scales (Department of Transport and Main Roads).
Transurban breaches concession deed
CityLink overcharged customers by $1.3 million by raising the administration fee before receiving approval from the Victorian Government. Despite breaching the concession deed, the State agreed with CityLink that customers would not be refunded overcharged fees. Could it be state-approved robbery?
Top 8 toll complaints
Outrageous Fees & Fines
Escalated to State Infringement
Toll Notices Not Received
Poor Customer Service & Long Waits
Conflicting Stories From Toll Operator
Phone/Online Payment: Wouldn't Process, or Didn't Show
Toll Operator Promised Call Back. Never Called Back
Transurban CEO Scott Charlton made $6.3 million in pay and perks last year.
Former NSW Premier Nick Greiner is now a Transurban Adviser
Did you know?
In almost all cases, State Gazetted toll road charges and fees are the maximum that Transurban can charge, but they are not required to charge the maximum. Our Transurban Whistleblower says "They always charge the maximum".
According to slide 55 in Transurban's 2016 Investor Presentation, less than 2% of transactions escalate to the infringement process. With over 1.8 million transactions daily there could potentially be as many as 36,000 infringements issued per day.