Ombudsman finds significant problems with telco sales practices

Last week YourLifeChoices reported on how Telstra was using unscrupulous sales tactics to target older Australians, but it appears as though that might be just the tip of the iceberg.

The Telecommunications Industry Ombudsman (TIO) released a report on Monday that found sales practices that led to consumers signing up for products or services they didn’t need were rife.

The report, titled Helping telco consumers sign up to the right phone and internet products, found that key terms were often excluded from advertising and point-of-sale information.

Read more: Telstra accused of overselling to older Australians

Online information about products and services was also difficult to find and understand, according to the findings of the report, which also found many instances of irresponsible sales tactics.

Some of the complaints the TIO received surrounded offers of free accessories if they signed up for a new mobile plan, but later finding they were charged for these items.

The TIO’s investigation found that two providers under scrutiny were not accurately describing their accessory plans to customers, using terms like ‘free’, ‘gift’, and ‘included’, or telling customers the charges would be credited if they bought or upgraded their service plan.

Read more: Google maps to become more intelligent

Case study
The TIO offers the following case study for a common selling problem, which it claims has been addressed by the telecommunications company since it was alerted to the issue (all the names in the case study have been changed).

Angelo went to a Pebble Telco store to upgrade his mobile plan and handset. The salesperson said Angelo could choose accessories to a certain value as part of a promotion Pebble Telco was running. He was not told there was any cost for the accessories.

When Angelo’s next bill showed a cost for each of the accessories he had chosen, he contacted the store. He told Pebble Telco he had been charged for accessories the salesperson had given him as part of a promotion. Pebble Telco said it had not offered the accessories for free and did not agree to credit the charges.

Read more: Netflix to target older demographic

Consumers also told the TIO that they were not directed to terms and conditions during sign-up and could not find them online when they went looking later.

“In online environments, relevant terms and conditions should be readily available before, during, and after sign-up,” the report stated.

“In some complaints we see, consumers have needed to visit multiple sources or web pages to understand the terms of the product or service they are buying.

“Consumers should not need to conduct an exhaustive search or review long or complex terms and conditions to find key information about what they will owe and what they are entitled to receive.”

The Communication Alliance, the leading industry body for the telecommunication sector, said that providers had acted quickly on the finding from the TIO once the issues were raised.

Communications Alliance chief executive John Stanton said the report confirmed that providers had taken proactive steps to resolve issues when they were raised.

“No consumer should ever feel pressured to sign up to something they don’t want, and they should always have access to clear information on what they are considering,” Mr Stanton said.

“We were pleased to see that, once made aware of a problem, RSPs (retail service providers) took proactive steps to resolve it, even beyond the complaints raised through the TIO. This included contacting all impacted consumers, issuing refunds and changing forward practices.

“Some of the reported investigations were not about direct wrongdoing on the part of the telco, but instead found ways that telcos and consumers could better communicate.”

Tips when signing up for products and services
Before signing up to a new product or service, check the Critical Information Summary and make sure you know:

  • the length of the contract
  • the plan’s call and data limits, and when these reset
  • what happens if you use more than your call or data limit
  • what happens if you cancel the contract early
  • the costs to buy any equipment you need to use the service.

If your provider offers you a ‘bonus’ or ‘free’ product, ask whether there are costs or conditions attached to it. Consider whether you need the product and check how its value through the provider compares with the market.

If you have signed up for something you didn’t expect, talk to your provider about what options are available. Depending on your circumstances, you may be able to change your plan or exit your contract.

Have you ever been sold a product you didn’t need or want by a cunning salesperson? What did you do to rectify the situation? Which company do you use for your phone and internet services? Are you happy with the services you receive?

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

Written by Ben Hocking

Ben Hocking is a skilled writer and editor with interests and expertise in politics, government, Centrelink, finance, health, retirement income, superannuation, Wordle and sports.

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