Investigation finds poor sales practices, hidden costs and unclear information affecting telco consumers

The Telecommunications Industry Ombudsman’s (TIO) latest systemic investigation report reveals the problems with telco sales practices that can lead to consumers signing up for products or services they don’t understand or need.

The report “Helping telco consumers sign up to the right phone and internet products” found:

  • advertising and point-of-sale information does not always cover key terms,
  • online information about telco products and services can be difficult to find and understand,
  • telcos do not always responsibly promote or sell their products and services, and
  • consumers sometimes unknowingly sign up for products or services they do not need.

Complaints to the TIO can be the tip of the iceberg. In one case the TIO received just under 100 complaints about a telco’s selling practices during a promotion. 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.

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. Telcos also contacted affected consumers about payment options and offered to release them from contracts where appropriate.

The positive response to these systemic investigations demonstrates the importance of cooperation between telcos and the Ombudsman. 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.

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