A new report has lifted the lid on the practice of telemarketers misleading and pressuring Australian consumers to sell them National Broadband Network (NBN) services they may not want or need.
The Telecommunications Industry Ombudsman’s (TIO) Misleading telemarketing of NBN services report, published on 1 August, highlights several telemarketing tactics employed by “a small number” of NBN retail service providers (RSPs), including suggesting consumers will lose their services and phone numbers if they don’t sign up immediately and being misleading about who they work for.
The report comes after an investigation by the TIO into the telemarketing sales practices of several NBN services retail providers, many of which came to the attention of the Ombudsman’s office because it had identified a cluster of similar complaints about misleading conduct by the same provider.
Between January and December last year, the TIO’s office received 1,729 complaints about misleading conduct involving services delivered over the NBN.
“Based on enquiries received by our office, a small number of retail service providers are increasing confusion by using misleading telemarketing practices to sell their NBN plans,” the report authors said. “Complaints of this kind have continued.”
The TIO said that consumers have reported feeling pressured into signing up for NBN services by telemarketers who suggested end users’ current providers won’t be able to supply services once the NBN arrives, and who have provided inaccurate or unclear information about NBN pricing and contract terms.
According to the TIO, consumers reported that misleading telemarketing practices have seen them end up locked into contracts that aren’t suitable, don’t meet their expectations or are more expensive than their previous plans.
Older customers in particular seem to feel the impact of the misleading telemarketing practices, a sentiment consistent with research conducted by the Australian Communications and Media Authority (ACMA), which has found that there was lower understanding about connecting to the NBN among people who are 65 and over.
Australia’s Telecommunications Industry Ombudsman Judi Jones said the telemarketing tactics under scrutiny was concerning behaviour from a “small group” of phone and internet providers, and that it should stop.
“In some cases we have shared information about this issue with the relevant regulators so they can consider further action,” Jones said. “Moving to the NBN is not automatic, and consumers need to know they can make a measured and informed decision about which NBN provider is right for them. If the consumer is feeling pressured by a telemarketer, it is fine to hang up.”
Jones also noted that telecommunications industry body, the Communications Alliance, is currently working with the telco regulator to address aspects of the telemarketing issues.
For its part, the Communications Alliance has condemned the behaviour of RSPs that have fallen afoul of the TIO over their sales tactics. The industry body’s CEO John Stanton said in a statement that providers such as those engaging in misleading sales tactics are “not welcome in our industry”.
“It is very disappointing when a provider breaches consumer trust, and the rules it is required to observe,” Stanton said.
“We are working with Communications Compliance and the ACMA to provide education on supplier requirements across the sector, and will always work with industry members who are looking to improve. We were pleased to see that a provider highlighted in the TIO’s report had revised its practices.”
Stanton, however, suggested that in such a large marketplace – with some 1600 providers, according to the TIO’s 2018 figures – small players sometimes attempt to operate outside of the rules.
“Communications Alliance members are working with the ACMA to act against such behaviour and prevent those providers from continuing to operate,” he said.
The TIO’s report is released as the updated Telecommunications Consumer Protections (TCP) Code comes into effect, with Stanton flagging “vigorous new rules on selling practices”, which are expected to help the ACMA enforce against the practices raised in the TIO’s report.
The revised Telecommunications Consumer Protections (TCP) Code was written by Communications Alliance and its members, in collaboration with consumer representatives, regulators and government. The Code is mandatory for all telecommunications providers servicing residential and small business customers, and is enforced by the ACMA.
It is aimed at providing consumer safeguards in the areas of sales, service and contracts, billing, credit and debt management, financial hardship, and changing suppliers.
Under the new updated Code, when selling long-term, higher-cost services, suppliers will now need to perform an external credit check and obtain information as to how customers will be able to afford the contract.
In a move particularly relevant to telemarketers like those targeted by the TIO, the new Code also sees suppliers face stricter rules on selling practices, requiring them to ensure that sales representatives promote and sell in a fair, transparent, responsible and accurate manner, and that they clearly explain key terms and costs to customers.
“The upgraded protections touch on all customer interactions with their provider,” Stanton said. “This includes strengthened rules on selling practices, credit assessment, and financial hardship.
“These are priority areas for the ACMA and Communications Alliance has been working with them and the industry-created compliance body Communications Compliance to educate providers on their new obligations,” he said.