Does Canada need new rules to quash misleading telecom sales tactics?

Does Canada need new rules to quash misleading telecom sales tactics?

As consumer protection groups call for stricter rules to protect Canadians from misleading and aggressive sales tactics, Canadian telecoms admit it’s impossible to keep every customer happy at all times given the volume of TV, internet and wireless subscribers they serve.

Canada’s two largest telecommunications giants, BCE Inc. and Rogers Communications Inc., alone fielded a combined 114 million customers calls in the past year alone, according to submissions to the Canadian Radio-television and Telecommunications Commission’s inquiry into the industry’s retail sales practices.

Yet only a fraction of callers complained about sales matters. For Bell, 0.05 per cent (24,041) of 54 million calls were escalated due to complaints about sales matters. For Rogers, only 0.004 per cent (2,200) of 60 million customer calls complained about sales issues. (Bell has about 22 million customer connections, whereas Rogers serves about 13 million customers.)

They revealed the numbers to indicate what they argue is the relatively small scale of the problem as the CRTC considers whether it should introduce new rules to govern misleading or aggressive sales tactics.

The federal government ordered the CRTC to investigate whether the country’s largest telecoms are misleading Canadians after a series of CBC articles revealed questionable sales tactics. The articles quoted employees, mostly from Bell and some from Rogers, who felt pressure to sell services to people that didn’t need them, in one case selling an internet package to a senior without a computer.

Rogers, Telus Corp. and Shaw Communications Inc. argued there is no need for extra regulations on top of the Competition Act, the Telecommunications Act, the Wireless Code and the Television Service Provider Code, all of which can be used to deal with misleading or aggressive sales.

Instead, they said the problems reflect a complex, competitive industry where offers consistently change and misunderstandings can arise considering companies deal with hundreds of thousands of customers every day.

“Given the choices available to consumers, there may occasionally be some miscommunications or misunderstandings,” Rogers stated in its submission, adding its goal is to get to zero complaints.

The providers said they do not tolerate misleading or aggressive sales tactics and outlined steps they take to train employees to avoid hiccups.

Telus said it spends billions of dollars on customer satisfaction — it has an industry-leading retention level — and worried it would create “needless damage” if the CRTC lumps it in with a group that engages in such sales practices. It suggested instead that the CRTC implement a code of conduct that permits consumers to seek redress from the Commission for Complaints for Telecom-Television Services.

Bell, which also highlighted the consumer protections available, stopped short of saying the CRTC shouldn’t introduce new rules.

“It is clear from many of the interventions filed that each of the major carriers continue to face challenges in ensuring that customers are well-served and provided with complete and accurate information before a sale is completed,” Bell submitted.

If the CRTC determines these issues are systemic, Bell said it would be pleased to participate in developing an industry-wide solution.

The Competition Bureau, which doesn’t typically weigh in on CRTC proceedings, submitted that new consumer protections may be necessary depending on whether the CRTC uncovers systemic problems with sales tactics.

“Any resulting regulatory framework should be narrowly tailored to address only those practices that can be shown to be harmful, in order to preserve the role for market forces to allow competition to flourish,” it stated.

The bureau is already responsible for policing deceptive marketing practices under the Competition Act, and has previously taken action against the Big Three related to false or misleading claims in advertising.

In 2016, the companies agreed to rebate $24 million to customers over ads for premium text messaging that resulted in extra charges. In separate actions in 2015 and 2011, Bell paid administrative penalties amounting to $11.3 million related to misrepresentations over pricing, reviews and ratings. In 2014, the bureau ordered Rogers to pay a fine of $500,000 over claims in Chatr’s marketing campaign.

While the telecoms insist new rules aren’t necessary and the Competition Bureau advocates for a light touch, a coalition of consumer groups have urged the CRTC to consider more radical changes.

“Consumers … have made it crystal clear that they are unhappy with the present ‘buyer beware’ sales culture of the industry and that it must change to accord consumers fairness and protection,” the Fair Communications Sales Coalition stated.

It argued bundled services are presented in a confusing manner that can be especially harmful to vulnerable individuals such as seniors, people with disabilities, and those with low income or language barriers.

It called for major changes to the incentives imposed upon sales reps encouraged to reach sales quotas “at any cost,” asking for limits on employee discipline when employees don’t meet sales targets. It also suggested a ban on door-to-door sales — the telecoms do not want this — and limits on “free” products that are linked with service charges.

The CCTS, the industry watchdog that facilitates disputes between consumers and telecoms, said its mandate doesn’t allow it to investigate whether a telecom intended to mislead a customer. But it said the main problem with sales practices occurs when there’s a mismatch between what the consumer thinks they bought and their actual experience with the subscription.

The CRTC will hold public hearings on the issue in the fall.