Highlights of the Report on
Misleading or Aggressive Communications Retail Sales Practices
In response to an Order in Council, read the CRTC's report on Report on Misleading or Aggressive Communications Retail Sales Practices.
Read the full report or read the highlights below.
Caveat: The following highlights are in no way exhaustive; our full report contains an in-depth account of the issue, the steps we (the CRTC) took to research the issue and considerations for future action.
The Order in Council P.C. 2018-0685 (external link) noted that Canadians have expressed substantial concern regarding the use of misleading or aggressive sales practices. Such practices can cause stress, confusion, and frustration, and can lead to the price paid by Canadians for telecommunications services being sometimes unfair, unpredictable, or higher than they expected. Canadians deserve a competitive marketplace where consumers are treated fairly and are empowered to make informed decisions with respect to their telecommunications services. As a result, the Govenor in Council directed us, the CRTC, to produce a report on the use of misleading or aggressive retail sales practices by Canada’s large telecommunications carriers (the Service Providers). The Order in Council set out many issues for us to report on, including
- the prevalence of such practices;
- existing consumer protection measures to address them; and
- ways to strengthen these measures to empower consumers to make informed decisions about telecommunications services and to promote fair treatment of consumers by the Service Providers.
Specifically, the Order in Council required us to answer these questions (paraphrased):
- Are Canadians experiencing misleading or aggressive sales practices?
- What are Service Providers doing to identify, monitor, and reduce the risk of misleading or aggressive sales practices?
- What consumer protections exist to promote fair treatment by the Service Providers and to empower consumers to make informed decisions?
- What should be done to empower consumers, promote their fair treatment, and prevent misleading or aggressive sales practices?
What we heard
6 weeks of public consultation
- Over 2,300 individual Canadians
- 65 current or past employees of the Service Providers
- The CCTS
Commission for Complaints for Telecom-television Services
(an independent organization dedicated to resolving customer complaints about telecommunications and TV services)
- Consumer and public advocacy groups
- Unions representing employees
- Government agencies and departments
- 12 Service Providers we identified in the Notice of Consultation
Public opinion research with Canadians
- 1,603 participants from a representative panel survey
- 7,075 participants in a voluntary survey
- 10 focus groups across Canada in urban and rural areas with Anglophones and Francophones
- 10 in-depth telephone/online-chat interviews
5-day public hearing
- 785 tweets from nearly 190 people
- 10 individuals
- 8 groups
- The CCTS
- The 12 Service Providers
We held an online public consultation open to all persons. We gathered further comments with a public hearing which ran alongside a Twitter chat #CRTCForum where we collected comments from Canadians who did not attend the hearing. We received a wide range of views from hundreds of individual Canadians, as well as from past and present sales representatives of the Service Providers, the Commission for Complaints for Telecom-television Services (CCTS), consumer and public advocacy groups, researchers, unions, government bodies, and the Service Providers themselves.
We also hired Ipsos Public Affairs (Ipsos) to poll Canadians to help us further understand their experiences with misleading or aggressive sales practices.
Our engagements and research helped us answer the first three questions from the Order in Council:
Are Canadians experiencing misleading or aggressive sales practices?
Overall, four in ten (40%) Canadians who responded to the online panel survey report having experienced sales practices by telecommunications companies in Canada that they consider to be aggressive or misleading, the majority of which report their most recent experience took place within the past year (60% of those who experienced these tactics or 24% of all Canadians).– Ipsos Report
Having considered the matter in depth, we found that it is apparent that misleading or aggressive retail sales practices are present in the telecommunications service provider market in Canada and, to some extent, in the television service provider market Footnote 1. 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 us.
What are Service Providers doing to identify, monitor, and reduce the risk of misleading or aggressive sales practices?
The record of this proceeding demonstrates that the leading cause of customer frustration with retail sales practices is, as succinctly summarized by the CCTS, the result of a mismatch between what customers think they are going to get and what they actually get. There has been no evidence that carriers condone or encourage such "mismatches" through misleading sales practices. In fact, all communications providers seem to have extensive and reasonable measures in place to prevent misleading and aggressive sales practices.– Bell Canada
The Service Providers have in place internal measures that are supposed to identify, monitor, and prevent misleading or aggressive retail sales practices. We found that there is a gap between these measures and the behaviours reported by Canadians on the record in relation to some Service Providers. We consider 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.
What consumer protections exist to promote fair treatment by the Service Providers and to empower consumers to make informed decisions?
We found that while existing consumer protections are extensive, there are gaps in terms of Canadians’ awareness of them and their effectiveness in terms of prevention and redress. We consider that improvements must be made in relation to consumer protection and empowerment.
For supporting information:
- Telecom and Broadcasting Notice of Consultation CRTC 2018-246, Report regarding the retail sales practices of Canada’s large telecommunications carriers
- Full list of consultation documents from the consultations and hearing, including the #CRTCForum tweets, Commission Letters, and more
- Read the individual submissions from interveners
- Read the results from the public opinion research in the Ipsos Report, Consultation on Canada’s large telecommunications carriers’ sales practices
- Review what participants said at the hearing by reading the transcripts
- Check out the #CRTCForum tweets to see what people were saying during the hearing
- Read our full report
Answering the final question from the Order in Council, "What should be done to empower consumers, promote their fair treatment, and prevent misleading or aggressive sales practices?", in our view, consumer protections should be strengthened to address the occurrence of misleading or aggressive sales practices and to ensure that Canadians are empowered to make informed decisions and are treated fairly.
Expectation for discounts and promotions for Canadians with disabilities
First, we are setting an expectation on an issue raised during the public process by the community of Canadians with disabilities that is of concern to us. There were reports that some service providers offer mobile wireless service packages designed to meet the needs of Canadians with disabilities at special rates that are not known by salespersons and that cannot be combined, or are inconsistently combined, with other general promotions and offers. Canadians with disabilities commented on the record that this practice is unfair. We found that offering these types of packages at reduced prices is a best practice that is in the public interest, and we expect accessibility-related measures and these discounts to be offered in addition to any other offer or promotion, not instead of it.
Protections for vulnerable Canadians
We found that misleading or aggressive sales practices have a more serious effect on vulnerable Canadians. To better protect these Canadians, we will consider:
- the creation of a new, mandatory Internet Code for Internet service providers, which could potentially expand some of the protections that currently exist for wireless and television customers to Internet customers;
- requiring service providers to provide pre-sales quotes that better inform customers and/or trial periods that would allow customers to cancel a service that does not match what they were offered;
- expanding the CCTS’s mandate to include handling complaints about misleading or aggressive retail sales practices, and improving consumers’ awareness of the CCTS as part of the next review of the CCTS; and
- creating a “suitability standard,” which would require service providers to ensure that their offers and promotions match the customer’s needs and means.
Monitoring, evaluating and addressing problems with internal measures
We found that the internal measures put in place by the Service Providers to address misleading or aggressive sales practices are not always effective. In order to test these measures on an ongoing basis, we will consider:
- monitoring all service providers’ retail sales practices through research initiatives such as a nationwide secret shopper program that we will oversee, the results of which will be published, and through increased data collection by the CCTS on consumer complaints;
- requiring service providers to publicly report on complaints related to misleading or aggressive retail sales practices as we define;
- reviewing our approach to compliance and enforcement regarding existing protections to ensure that these protections are effective and efficient, such as the yearly compliance assessment used under the Wireless Code; and
- imposing additional mandatory measures on service providers with poor sales practices.
Reducing the gaps in awareness and effectiveness of consumer protections
We found that there are gaps in the awareness and effectiveness of existing consumer protections. In order to address these gaps, we will consider:
- creating new sources of information for consumers, such as checklists or information bulletins, to be posted on our website – a practice that would empower Canadians with information and tips on dealing with service providers, what their rights are, and where to go when they have a complaint; and
- consolidating our various codes of conduct for service providers (such as the Wireless Code, the Television Service Provider Code, and any future Internet Code that may be created).
Our report to the Governor in Council is an important step in empowering consumers and promoting fair treatment of Canadians. We will further investigate these effective and feasible ways to strengthen consumer protections presented in this report and will keep you and the Government informed of its progress on the actions it undertakes to minimize misleading or aggressive sales practices in the telecommunications market.
For the complete record of our conclusions,
Read the full report.
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