Telcos and credit providers failed consumers during COVID

The overriding message during the pandemic has been ‘we are all in this together’, but research has found that some businesses may have missed the memo.

The Consumer Policy Research Centre (CPRC), in conjunction with Roy Morgan Research, has created a scorecard on the sectors that have failed consumers the most during the pandemic.

The Consumers and COVID-19: Sector Scorecard found that telecommunications companies and credit and personal finance providers delivered the worst customer experience and let down their customers when they needed the most support.

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The scorecard collected data from 6900 Australian consumers in monthly surveys from May to December 2020 and looked at six essential survey markets (energy, telecommunications, mortgage, credit/finance, insurance and private rental providers).

The research explored which providers were proactive in adopting supportive practices for consumers who needed help, such as offering payment assistance or waiving fees and which undertook negative practices that made consumers worse off.

CPRC chief executive Lauren Solomon said there were several reasons why telecommunications companies fared particularly badly in the surveys.

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“Weak and piecemeal hardship protections, poor customer service culture and the challenge of largely offshore customer service staff, all contributed to leaving telco consumers lacking the support they deserve from an essential utility sector,” Ms Solomon said

“The self-regulatory era of yesteryear for this sector needs to end. Telco products and services are now the gateway to almost every other facet of our lives. There is a higher degree of responsibility to the community.

“Telco providers ranked extremely poorly on user experience and accessibility, which is disappointing and ironic, given their core business is communications. Australians deserve better from these companies.”

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The rapidly growing buy-now-pay-later market was a big contributor to the credit and personal finance sector performing so badly in the surveys, according to Ms Solomon.

“We know that as time went on, consumers exhausted available resources and increasingly turned to credit to make ends meet,” Ms Solomon said.

“We’re seeing this show up in our scorecard, with consumers outing this sector as providing some of the least fair and transparent information in contracts or agreements.”

Banks adopting an early, sector-wide approach to the deferral of mortgage repayments, saw this sector of the business community top the survey results, while governments introducing eviction moratoriums and rental relief grants also saw the private rental market perform well.

The CPRC said that the results highlighted a need for clear, effective consumer protections in the telco industry, which could be provided in the consumer safeguards review currently under consideration by the federal government.

Ms Solomon also called for the development of a vulnerability strategy for the telecommunications sector and the application of credit regulation to buy-now-pay-later products and services.

What companies have failed you during the pandemic? Are there companies that have gone over and above to help you in a tight situation during the pandemic? Why not share your thoughts in the comments section below?

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Written by Ben