GATINEAU – “Having considered the matter in depth, the CRTC finds that it is apparent that misleading or aggressive retail sales practices are present in the telecommunications service provider market in Canada.
“These practices exist in all types of sales channels, including in store, online, over the telephone, and door to door. They occur to an unacceptable degree; they are harming Canadian consumers, in particular vulnerable Canadians; and they are a serious concern for the CRTC.”
So begins the Commission’s report on the sales tactics of the Canadian telecommunications industry, released today. The Regulator hosted a contentious hearing back in October, a review it initially resisted undertaking, but in the end was insisted upon by the federal government with an Order-in-Council.
The feds asked for a report by the end of February and the five-day long October hearing featured angry consumers and consumer groups, academics, defensive telcos, cellcos and cablecos.
Since the release issued today is just a report, there is no decision arising directly from it, but it does warn of upcoming processes which likely will end up codifying a number of things to make sure sales practices improve, because the safeguards the companies have in place now are not good enough, it says.
“(T)he CRTC considers that some of the Service Providers’ measures have not been effectively put in place and are not fully achieving their stated goals of addressing misleading or aggressive sales practices and complaints related to those practices,” says the report.
The additional public hearings will be announced soon (and will at least begin this year) but in the meantime, the CRTC plans to take action immediately by launching a new secret shopping program to study the sales channels directly. This is likely to start in the next few months.
After thanking those at the October hearing who presented their own damaging secret shopper findings (Dr. Mary Cavanagh, Kristianne Anor, Sean Grassie, and Tara Hristov from the University of Ottawa), the Regulator says it is going to begin keeping direct tabs on sales itself by sending people into stores – as well as making calls to call centres – so it can get a direct look at what’s happening when consumers face the carriers’ agents.
(Ed note: It might be worth everyone’s while if carriers invited commissioners and/or senior CRTC staff into call centres for a day of listening in on consumer calls – or even shadowing telecom employees on audits, or sales and repair visits, or in stores, in order to get some real front line experience.)
“The CRTC will develop its own secret shopper program in the future, periodically targeting specific sales channels or locations across Canada."
“The CRTC will develop its own secret shopper program in the future, periodically targeting specific sales channels or locations across Canada. This program will provide insights into Canadians’ experiences with communications service providers. The CRTC intends to publish the results of the secret shopper program for consumers to use as another piece of information when making decisions about their communications services.”
The Commission also pointed to serious gaps in the knowledge Canadians have about what they can do when they run into problems with their provider, such as asking for the recording or transcripts of phone calls (which the companies do store) and better awareness of the Commission for Complaints for Telecom-Television Services (CCTS). It also pointed to gaps in company reps’ knowledge when it comes to their own plans dedicated to deaf customers, for example.
“Canadians who may be more vulnerable due to their age, a disability, or a language barrier are already facing barriers to making informed decisions on services that meet their needs and means,” reads the report. “These vulnerabilities are a compounding factor that increases the harmful impact of misleading or aggressive sales practices for those Canadians.”
(Ed note: Properly serving vulnerable Canadians is something which everyone needs to get better at and if we were betting, we’d predict this will be the first proceeding to come from this report. No one wants any more seniors sold broadband plans when they don’t own a computer.)
This leads directly into another primary Commission concern – arriving at some sort of suitability test for carriers so that consumers are not pressured into signing up for services they will never use, or can’t afford. “The CRTC will consider investigating the necessity of a mandatory suitability test and what would be included in such a test, either in the context of a proceeding to implement a code of conduct or as part of a stand-alone process,” says the report.
Also – with a TV service provider code of conduct and a Wireless service provider code of conduct already in existence – and with a third Internet service provider code of conduct on the way, the CRTC will also “consider whether harmonizing its existing codes is warranted after the Internet Code proceeding is finished and any resulting code comes into force,” says the report. Code confusion is something Cartt.ca raised earlier.
They key takeaway for all providers (even the ones who say they are doing great!) is that they’re not doing enough, and they must improve, says the Commission, which added it may well consider administrative monetary penalties (AMPs, or fines), too.
“The record of this proceeding indicates that a significant portion of Canadians are experiencing misleading or aggressive sales practices by the Service Providers,” it concludes.
“We are extremely pleased that the CRTC believed those consumers and mapped out how to help." – John Lawford, PIAC
The Public Interest Advocacy Centre (which appeared at the hearing as part of the Fair Communications Sales Coalition of ACORN Canada, National Pensioners Federation and Canadian Association of Retired Persons) was gratified by the report. PIAC was one of the primary advocates pushing for this proceeding after media reports last year outlined some shady sounding dealings in the telecom sales marketplace.
“Consumers told us that they were being misled, oversold and treated aggressively when they interacted with their telecom and TV service providers, whether at the door, on the phone, in a store or online,” said John Lawford, co-counsel to the FCSC, in a press release. “We are extremely pleased that the CRTC believed those consumers and mapped out how to help,” he added.
As for the large carriers themselves, they all profess themselves happy to work with the Commission on any future proceedings which may arise from this report.
“We’ll be studying the report in depth but we’re happy to see the CRTC took note of several recommendations we made, and we look forward to continuing to working constructively with them on the issue,” said Bell in an emailed statement.
“We are committed to being clear, simple and fair with our customers in every interaction. We look forward to working with the Commission to reinforce our customer-first approach,” said Rogers in its response.
“In its report, the Commission largely agrees with Telus’ recommendation that the solution is likely improved clarity and enforcement of the existing rules to better educate and protect customers, and in turn to discipline providers who continue to engage is misleading or aggressive sales practices. We are still reviewing the report and will participate fully in any subsequent proceedings,” said Telus in its statement attributed to Zainul Mawji, president home and small business solutions.
As for Innovation, Science and Economic Development Minister Navdeep Bains, who ordered this report, he thanked “the CRTC for its work and the range of actions being considered to respond to these issues. We will review the report’s recommendations and look forward to concrete solutions being put in place. We are committed to taking action to address this issue,” he said.
