Onus is on telecoms to fix misleading sales practices: CRTC chairman

Canada’s telecommunications industry suffers from an “unacceptable degree” of misleading and aggressive retail sales practices that are “harming consumers” and vulnerable Canadians, the CRTC concluded in a report released Wednesday, following hearings on sales practices last fall. CRTC Chairman Ian Scott said in a phone interview he hopes the proceeding and report will prompt “immediate activity by the service providers.” “It should be clear to them these practices are unacceptable and the onus is on them to fix it, regardless of whether we have new rules in place. We will put the rules in place and make sure they fix it, but there’s nothing to stop them from going down the right road immediately,” he said. In the report, the CRTC outlined that “it is apparent that misleading or aggressive retail sales practices are present in the telecommunications service provider market in Canada and, to some extent, in the television service provider market.” It said such sales practices “occur to an unacceptable degree; they are harming Canadian consumers, in particular vulnerable Canadians; and they are a serious concern for the CRTC.” It said the harmful practices exist across all types of sales channels, including in stores, online, over the phone, and door-to-door, and the record of the proceeding shows a “significant portion of Canadians are experiencing misleading or aggressive sales practices” from service providers. It noted that seniors, disabled Canadians and those with language barriers -- in particular, Canadians whose first language is not English or French -- are the most vulnerable to unsavory sales pushes. The CRTC said the problem exists with “certain telecommunications services providers” in a release, but the commission did not single out particular providers nor say it found a systemic problem. The commission proposed a number of new measures to address misleading sales tactics on top of its consideration of a new internet code. It plans to consider requiring service providers to give pre-sales quotes and trial periods customers can cancel if the service is not what they expected, and create a new standard requiring providers to make sure offers and promotions line-up with their customers’ needs. It’s also proposing to expand the mandate of the Commission for Complaints for Telecom-Television Services to include handling complaints about retail sales pressure tactics and increase its data-collection. The report is not a CRTC decision, so it will need to hold a follow-up proceeding on policy proposals, but it sends a signal to the industry about what the regulator thinks will work best. Some ideas, though, it can start on sooner than later, such as setting up the CRTC’s own secret shopper program in the next few months -- something inspired by University of Ottawa researchers who presented in the proceeding. Current internal measures companies employ are not very effective, the commission’s report found, and there are large gaps in consumer protections, including low consumer awareness about where they go to get recourse. The regulator is also proposing a new set of best practices for telecom providers, including that Canadians should be able to easily obtain recordings or transcripts of their interactions with sales reps in a timely manner, at no cost. Desjardins analyst Maher Yaghi said in a Wednesday note telecom companies usually don’t like increased regulation, but the new measures may “end up being a good thing for the sector by reducing customer complaints and churn.” OpenMedia’s executive director Laura Tribe criticized it in a blog post for not having a “clear commitment for what the CRTC will actually do to curb these issues, timeline for when these considerations may be made, nor any penalties being issued to offending companies.” The Fair Communications Sales Coalition, a large consumer advocacy umbrella group made up of Public Interest Advocacy Centre (PIAC), ACORN Canada, National Pensioners Federation and Canadian Association of Retired Persons, welcomed the report in a release that called it a “milestone for consumer protection” which “vindicates consumer concerns.” The head of the coalition, PIAC’s John Lawford, said over the phone that it in some ways fell short by not including a door-to-door sales ban or addressing misleading “free” device promos, but weighed it as a win overall. “To have them say to the government: ‘people aren’t crazy, this is an issue, we expect the companies to deal with it, they say they have measures in place but their measures don’t work’ ... that’s a big enough deal in itself,” he said. “We won’t have these arguments of whether there’s a problem.” The CRTC heard from consumers, advocacy groups and telecoms through a regulatory proceeding that garnered 2,325 interventions from individual Canadians, many of which were prompted by letter writing campaigns, and then again at a week-long public hearing last fall where the focus of public outrage was directed mostly toward the biggest players. In particular, BCE Inc. was the subject of hundreds of complaints about sales practices in the proceeding. “Bell” received the most mentions overall in submissions followed by Rogers Communications Inc., according to a partially redacted CRTC briefing document obtained by The Wire Report through Access to Information that broke submissions down by issue and provider. During the proceedings, small companies blamed the bigger players for creating a PR problem for the industry. Incumbents defended their sales practices and track records in numerous filings and testimony saying they don’t tolerate employees using aggressive sales practices. They also stated the complaints from the proceeding make up a tiny fraction of their millions of customers. Bell’s intervention said 24,041 of its customer calls, representing less than 0.05 per cent over a year-long period, were related to sales practices. Rogers’ said it had only 2,200 complaints about sales practices, or 0.004 per cent of customer interactions that year. Telus has refused to make its internal figures about complaints public during the proceeding and did not provide them again Wednesday when asked. An Ipsos online panel poll commissioned by the CRTC ahead of the hearings that found four-in-10 Canadians said they experienced “aggressive” or “misleading” sales practices by Canadian telecommunications companies. Various industry players during the hearing disputed the poll’s findings as misleading, although an independent polling expert, Carleton University journalism professor Paul Adams, told The Wire Report there was nothing wrong with the polling methodology itself. The report and those hearings were result of an order from cabinet that the CRTC look into the matter after Canadians “expressed substantial concern” about sales practices, which came after a flurry of press coverage about alleged misleading or aggressive sales practices that started in fall 2017. The CRTC in the meantime has already proposed a mandatory code of conduct for internet service providers separate from that proceeding. Scott said work on a new internet code had actually started before the CRTC was asked by cabinet to look into unsavoury sales practices, and that he had started discussing it with staff not long after he arrived at the regulator. Spokespeople for Bell and Rogers both said they’re reviewing the report and are willing to work constructively with the commission. “Bell is always focused on improving the customer experience, delivering the best networks and communications products, and providing services to suit all customer segments,” said Marc Choma, while Rogers spokesperson Sarah Schmidt said it is “committed to being clear, simple and fair with our customers in every interaction.” But Telus went on the offensive against its competitors. Telus spokesperson Zainul Mawji said it is “disappointed that the CRTC did not differentiate between those carriers who appear to frequently engage in these aggressive and misleading sales practices and those, like Telus, who do not.” — With reporting by Kyle Duggan at kduggan@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Onus is on telecoms to fix misleading sales practices: CRTC chairman

News | February 20, 2019

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Onus is on telecoms to fix misleading sales practices: CRTC chairman

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