The Telecommunications Industry Ombudsman (TIO) has warned telcos against unclear and misleading selling practices after receiving 125,000 complaints last year.
The telco industry complaints and dispute resolution body uncovered examples of telco providers offering ‘free’ sign-up products and ‘free trials’ that customers were later billed for during 2020.
These emerged as part of 32 systemic investigations carried out during the 2020 financial year, with the TIO finding that telcos’ advertising material failed to cover key information and terms.
In addition, online information about telco products and services was found to be difficult to find and understand, leading to one customer receiving high charges for a supposedly pre-paid service.
“The findings of this investigation show consumers do not always understand what they are buying and this leads to problems," Ombudsman Judi Jones said. “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 for 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.”
In a recent investigation, the TIO also found that consumers who signed up with a telco during a promotion said the provider failed to add promised credits to their account.
That telco found it affected more than 10,000 consumers and as a result added credits totalling more than $1.4 million to customers’ accounts, the TIO said.
In addition to this, the TIO found that consumers sometimes unknowingly sign up for products or services they do not need.
“Consumers have very different levels of knowledge and experience with telco products and services,” the report said. “While some consumers might be familiar with a product or service, others might rely on the provider giving them the information they need.
“Some consumers tell us that when they are unsure which product or service is best for them, they prefer to discuss their needs with a provider in-store or by phone.”
In particular, older and non-English-speaking customers were found to be vulnerable to poor selling practices, especially regarding technical information.
The report coincides with the Federal Court of Australia's landmark ruling to fine Telstra $50 million for unconscionable sales conduct relating to Indigenous customers.
According to the ACCC, Telstra admitted it acted unconscionably when sales staff at five licensed Telstra-branded stores in Alice Springs, Casuarina and Palmerston, Arndale and Broome signed up 108 Indigenous consumers to multiple post-paid mobile contracts, which they did not understand and could not afford, between January 2016 to August 2018.