A systemic investigation by the Telecommunications Industry Ombudsman’s (TIO) has found poor sales practices, hidden costs and unclear information led consumers to sign up for telco products or services they didn’t understand or need.
In her report, Helping telco consumers sign up to the right phone and internet products, TIO Judi Jones said telcos didn’t always responsibly promote or sell their products and services.
Ms Jones said her investigation also found that advertising and point-of-sale information didn’t always cover key terms; online information about products and services could be difficult to find and understand; and consumers sometimes unknowingly signed up for products or services they didn’t need.
“Complaints to the TIO can be the tip of the iceberg,” Ms Jones said.
“In one case the TIO received just under 100 complaints about a telco’s selling practices during a promotion,” she said.
“After the TIO began looking into these complaints, the telco recognised the problem was widespread and credited a total of more than $1.4 million to over 10,000 affected consumers. The telco also improved its processes for future promotions.”
Ms Jones said that in each of the five investigations explored in her Report, the telcos improved their selling practices, which included updating advertising and increasing training for sales staff.
The Ombudsman said telcos also contacted affected consumers about payment options and offered to release them from contracts where appropriate.
“The findings of this investigation show consumers do not always understand what they are buying and this leads to problems,” she said.
“Telcos must advertise products accurately and make clear information available about what they are offering.”
Ms Jones said telcos offered a vast range of products and services and it could be difficult for consumers to keep up.
“If you are signing up to a new product or service, don’t feel pressured to sign up on the spot,” she said.
The Ombudsman provided five tips for phone and internet consumers, including that they think about whether a product or service was really right for them before signing up; check they understood what they were signing up for; ask if ‘free’ or ‘included’ features had extra costs; remember product advertising may not contain all terms and conditions; and talk to their telco if they’d signed up for something they didn’t expect.
The Ombudsman’s 15-page Report can be accessed at this PS News link.
