TIO outlines telcos' irresponsible sales practices

A new investigation report from the Telecommunications Industry Ombudsman (TIO) has found “problems” with telcos sales practices that can end up with consumers stuck with unnecessary products or services.

The report, titled “Helping telco consumers sign up to the right phone and internet products” found a range of issues with how information is given to consumers.

It outlined how key information can be excluded from advertising and at point-of-sale and also difficult to find online.

It stated that telcos at times "fail to responsibly promote or sell their products," which means that customers unknowingly end up out of pocket for products or services that they did not need.

The TIO outlined that consumer complaints can often lead to it uncovering a much greater problem.

It outlined one case where it received nearly 100 complaints about a telco during a promotion. An investigation found a widespread problem that affected over 10,000 consumers and involved around $1.4 million.

As in each of the five investigations the report outlines, the telco improved its processes for future promotions, updating advertising and increasing training for sales staff.

In each of the five investigations explored in the report, the telcos improved their selling practices, including updating advertising and increasing training for sales staff, and offered consumers the option to end their contracts.

The TIO said these responses shows the importance of cooperation between telcos and the Ombudsman and that “working together can lead to better outcomes for consumers and the broader telecommunications industry.”

Commenting on the release of the report Ombudsman Judi Jones said, “The findings of this investigation show consumers do not always understand what they are buying and this leads to problems. Phone and internet products and services are essential to our daily lives. Telcos must advertise products accurately and make clear information available about what they are offering.

“Telcos are offering a vast range of innovative products and services to keep Australians connected and it can 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. If something is advertised as “free” or “included” check if there are any conditions. Get clear information on costs and inclusions before you decide if the product is right for you.

“If you have signed up to a product or service you didn’t need, want, or understand, talk to your telco. If you can’t work it out together, contact my office – we’re free and here to help”.

The Ombudsman offers helpful tips for telcos on how to not rip off consumers.

It advises including all key information on advertising, like extra costs or conditions that may arise. Also, to make sure the Critical Information Summary and terms and conditions are easily accessible and presented in a way that is clear and understandable.

Finally, it suggests that salespeople make sure that customers actually understand a product or service thoroughly before they sign anything, rather than putting pressure on them to make an immediate decision.