CRTC scrutinizing telcos over sales practices
A new government-backed code of conduct is needed to protect consumers from common sales tactics used by the people and companies that sell telecommunications products, the Fair Communications Sales Coalition said Tuesday
"Certain of the companies . . . claim that competition alone can fix unfair sales practices. This is unlikely in practice," coalition representative Jennifer Chow told telecom regulators at a public hearing in Gatineau, Que.
"When a customer is duped into a sale, there are usually significant early-cancellation costs that deter customers from leaving and this does not hurt the former company."
Chow also disputed the claim that internal guidelines and rules issued by companies are effective in prohibiting misleading, aggressive and unsuitable sales -- saying actual sales practices are at odds with the values expressed by management.
"Whether this situation is due to the companies' loss of control of their sales force, lack of audits or oversight, negligence, wilful blindness -- or even intention -- is not relevant," Chow said.
"The results are what matter to consumers and the results are bad."
Chow's comments were made at the second day of the CRTC's public hearings into complaints of misleading and aggressive sales tactics.
The Canadian Radio-Television and Telecommunications Commission, the telecom industry's regulator, has been ordered to look into allegations of misbehaviour by sales representatives and report to cabinet by the end of February.
The coalition's delegation -- led by John Lawford, executive director of the Ottawa-based Public Interest Advocacy Centre -- told CRTC commissioners that Canada would ideally follow Australia's lead in establishing one mandatory, national code of conduct for providing and selling telecom services.
But Lawford -- who lobbied for this week's public hearings -- said it may be quicker to expand the role of the Commission for Complaints for Telecom-television Services, a private-sector body that works with CRTC.
The industry-funded CCTS is mainly set up to resolve customer complaints about wireless and television service contracts but it is specifically excluded from dealing with product and service pricing or claims of false and misleading advertising.
On Monday, CCTS commissioner Howard Maker said that data collected by his organization reveals just the "tip of the iceberg" without revealing what may be happening more broadly in the marketplace.
"We know there's a lot that's under the water line that we don't have access to -- to see and to comment on," Maker said in the first day of CRTC's hearings.'
Lawford said on Tuesday that he believes the complaint commission could oversee a new sales code on behalf of the CRTC -- as it currently does with the government regulator's separate codes for wireless and TV services.
"I guess our long-term strategy, at least at PIAC . . . would be a telecommunications code (encompassing all products) like they have in Australia. That's the end game," Lawford said.
"Getting to that stage may take some time. . . . The code that we are suggesting for right now, in effect, is an interim measure. It could be rolled into a larger code later."
Among suggestions for the sales code, Lawford said, would be a 15-day "cooling off" period after a contract is signed -- not to be confused with a "trial period" of 30 or 60 days suggested by several other delegations to the CRTC hearing.
"Because with a cooling off period, you don't have to give any reason. . . . That helps cover a lot of these cases where there's been a very grey-area sale that the consumer regrets," Lawford said.
"After that, we're seeking protections if there's misrepresentations or aggressions that could go past the 15 days."
Earlier Tuesday, a delegation that included Concordia University professor Kim Sawchuk and Montreal seniors advocate Anne Caines said that a 60-day trial period is necessary to protect people with limited money, such as the elderly.
"They're the ones that have everything at stake. If a bill goes up suddenly, they don't eat. We hear this," Sawchuk said.
A 60-day window for ending a contract would give the customer time to receive their first monthly bill with the new service -- and to discover mistakes, misunderstandings or deception, she said.
Among the most common types of complaints heard by the CRTC and CCTS are about a "mismatch" between a sales promise compared with the price and service actually received. Other complaints included sales of products or services that are too complex or unnecessary and unilateral increases to service fees before the end of a contract.