Telstra accused of overselling to older Australians

The banking royal commission revealed the alarming extent to which the finance sector was selling older Australians products and services they didn’t require. Now a concerning report suggests things might not be much better when it comes to telecommunications.

Consumer group CHOICE spoke to two people who said Telstra took advantage of them because of their age, leaving them frustrated after being left to pay higher bills for products and services they didn’t ask for or need.

In a scathing report, CHOICE also reported on two former Telstra staff members who described a sales-focused culture with little regard for whether the products being sold were wanted or needed.

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One woman, aged 68, while moving the family Telstra account into her name because of husband’s declining health, was sold what she thought were two free tablet devices.

Her daughter, Nicola Clement, checked the bills after her father passed away and discovered her parents had instead been signed up to purchase the devices on a 36-month repayment plan and would have to pay almost $300 per device to cancel.

“I feel that they have been taken advantage of in the worst possible way,” Ms Clement told CHOICE.

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“Dad’s health was deteriorating badly and he was on quite strong medication. Dad was always the one who was more technologically savvy and he thought he was on to a great deal and Mum went along with it,” she said.

Ms Clement explained that her mum had been left paying for devices that she didn’t want or need and that one of the tablets was still sitting in a box unopened.

Nola Lehninger, 91, told CHOICE that on a sales call with Telstra she was signed up to an internet plan that cost her an extra $15 a month, despite the fact that didn’t use the internet and didn’t even have a computer.

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“They never mentioned that I would be paying more,” she said. “I saw my bill and didn’t know what was happening. They must have thought I was so old I didn’t know what I was talking about.”

A carer had to call on her behalf multiple times before they agreed to lower her bill and refund the money she had paid over 12 months.

It is not the first time Telstra has been accused of overselling to vulnerable customers.

In November last year, the Australian Competition and Consumer Commission (ACCC) filed proceedings in the Federal Court, aiming to fine Telstra $50 million for “unconscionable conduct” over selling mobile phone plans to more than 100 Indigenous consumers who did not understand and could not afford the plans.

David (not his real name), a former Telstra employee for over 15 years, told CHOICE there was a highly competitive sales culture with bonuses such as overseas trips for those with the highest annual sales.

“It all added towards your tally. They used to have a board on the side for each team. You had your products and your add-ons, and they would track your tally each week and month,” he said.

“I was pretty competitive, I always wanted to be top three so I kept track of that. There was always competition between the guys and teams.

“At the end of the day, I guess, as a business, they didn’t care how you got the sales, as long as you got the sales.”

Another former staff member, James (not his real name), who worked with the company about five years ago, said he was castigated by management for not upselling to older customers a Telstra phone insurance plan he felt they didn’t need.

“It’s all sales focused, it’s not even about matching to needs or anything, it’s all profit motive. I know it’s a business, but it has a duty to its customers not to be doing some of these aggressive sales tactics,” he said.

Financial Counselling Australia (FCA) recently conducted a survey of financial counsellors, seeking feedback on how their clients have been affected by issues with telcos. 

Mis-selling was a major theme of the report with at least 80 per cent of financial counsellors reporting that mis-selling or overselling had contributed to their clients’ financial difficulties.

FCA chief executive Fiona Guthrie said the report highlighted how widespread the problem was in the community.

“It’s a really huge problem and we shouldn’t be surprised,” she said. “The whole industry works on a commission-based sales model and as soon as you’ve got commission-based sales, you incentivise poor practices which take advantage of people’s vulnerability.”

A Telstra spokesperson told CHOICE the company took the issue of overselling seriously and was proud of the work they had done to support seniors. 

“We have no tolerance for overselling or mis-selling; our model is strongly focused on the needs of the customer,” the spokesperson said. 

“We have a balanced scorecard approach that takes into account customer outcomes, compliance and sales results as part of the remuneration model for staff.”

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?

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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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