Report on
Misleading or Aggressive Communications Retail Sales Practices

What could and should be done to promote the fair treatment of consumers?

• Do consumer protections need to be strengthened to empower consumers to make informed decisions and to ensure they are treated fairly?
• What effective and feasible ways to strengthen consumer protections should be considered?

It is integral that Canadians have protections in place to ensure that they are not being taken advantage of in sales transactions for telecommunications products and services. Telecommunications services are a critical component of Canadian society today. […] As a fundamental service, all Canadians must be able to trust that providers are fully disclosing all the necessary information required for them to make an informed purchase about a telecommunications product or service. Fair Communications Sales Coalition

In the CRTC’s 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.

Do consumer protections need to be strengthened to empower consumers to make informed decisions and to ensure they are treated fairly?

Nevertheless, even a single complaint about sales practices is one complaint too many, which is why TELUS proposes a system to resolve complaints in an efficient and cost-effective manner. TELUS

As discussed in the previous sections, the CRTC is concerned that, even with the internal measures put in place by the Service Providers and the consumer protections implemented by various governing bodies, many Canadians are still subject to misleading or aggressive sales practices. The CRTC considers that consumer protections should be strengthened to address these occurrences.

What effective and feasible ways to strengthen consumer protections should be considered?

• Expectation regarding vulnerable Canadians
• Protecting Canadians
• Testing the measures put in place by service providers on an ongoing basis
• Addressing gaps in the awareness and effectiveness of existing consumer protections
• Best practices for service providers
• Creation of a Telecommunication Consumer Organization
• Administrative Monetary Penalties (AMPs)
• Wholesale concerns

This report makes factual findings on certain problems and identifies paths to solutions.

In the sections below, the CRTC sets out an expectation on one issue and proposes various actions that it will consider undertaking, that service providers could voluntarily undertake, and that other stakeholders could consider further.

Expectation regarding vulnerable Canadians

DYK? Telecoms offer accessibility plans—discounts or terms specifically designed to meet deaf, blind customers’ needs. However #CRTCforum is now hearing that more often than not accessibility customers are not informed of these offers or are told that the plans are not available. @BenKlass

The CRTC strongly encourages service providers to review the record of this proceeding for instances where a customer’s situation made that person particularly vulnerable to misleading or aggressive sales practices, and to consider such instances in any review they may undertake of their sales practices and training documents.

Canadians who may be more vulnerable due to their age, a disability, or a language barrier would benefit from additional measures aimed at ensuring that consumers fully understand an offer and have sufficient time to consider their decision, including by reaching out to friends, family, or their service provider to discuss the details of the offer.

The CRTC is particularly concerned by comments, received from Canadians with disabilities and their advocates, that some of the Service Providers’ mobile wireless service packages offered at special rates to meet the needs of Canadians with disabilities are not known by sales personnel and cannot be combined, or are inconsistently combined, with their other general promotions and offers. These comments decried this practice as unfair and possibly misleading or aggressive, depending on the circumstances. The CRTC considers that it is a best practice in the public interest for accessibility-related discounts to be offered in addition to any general offer or promotion, and expects this to be the case. This issue may be considered in a future proceeding.

The CRTC notes that, as of the drafting of this report, Bill C-81, An Act to ensure a barrier-free Canada, has passed the House of Commons and is before the Senate. Service providers would be required to comply with that Act if and when it comes into force. That Act may impose on service providers new obligations that could address issues related to accessibility more broadly and that may address issues raised by parties on the record of this proceeding regarding the experiences of Canadians with a disability with misleading or aggressive sales practices.

Protecting Canadians

The CRTC has found that misleading or aggressive sales practices have a more serious effect on vulnerable Canadians. To better protect vulnerable Canadians, the CRTC will consider:

Creation of an Internet Code of Conduct

The CRTC has launched a proceeding to consider the creation of an Internet Code, independently from this report, in light of the increasing importance of Internet services and the rising number of consumer complaints about them. This Code could potentially extend some of the protections that currently exist for wireless and television customers to Internet customers.

Provision of sales quotes

Ex post approach to complaints resolution can solve problems after they’ve happened; but isn’t an ounce of prevention worth a pound of cure? #CRTCforum For starters, how about forcing telco’s to show prospective customers the contract terms before being asked to sign? @BenKlass

Some Service Providers noted that they are already providing or are planning to provide written sales quotes to customers to allow them to consider an offer at their own pace. These sales quotes have a predetermined expiration date to reflect the fact that rebates and offers change quickly.

The CRTC finds that providing written, time-limited sales quotes is an efficient and feasible way to limit misleading or aggressive sales practices; it considers that service providers should provide such quotes to consumers.

Provision of a trial period

Some parties suggested that all services should be subject to a trial period. Some Service Providers noted that they already offer trial periods, in part due to provincial laws requiring them to do so, while others argued that they should not be required to do so.

The CRTC notes that the Wireless Code and the Television Service Provider Code have some rules related to trial periods and early cancellation fees. The reasons underlying the creation of those rules could be applicable to other services. As noted above, a proceeding regarding the creation of an Internet Code has been launched, and a trial period has been proposed in the context of that proceeding.

The CRTC finds that trial periods are an important tool to allow consumers to determine whether a service truly meets their needs.

CCTS

Parties raised many suggestions and concerns relating to the CCTS, most of which would be more appropriately explored in a future CRTC review of the CCTS. The CRTC has announced that it will next review the CCTS in the 2022-2023 fiscal year, or earlier if deemed necessary. Here are some issues raised on the record of this proceeding that could be part of the considerations in that process:

• The CCTS mandate. As noted by many parties, including the CCTS, its mandate is to help Canadians with an existing business relationship with a service provider. In the case of misleading or aggressive sales practices, the CCTS cannot help a customer before they enter into a contract.
• The challenge of evidence. The CCTS noted that in helping customers with their complaints, it often faces situations where a customer has kept personal notes of what they were told, while service providers have their own internal documents, such as contracts, which may be considered more reliable but are not necessarily representative of the understanding of both parties.
• Awareness of the CCTS. The Ipsos Report noted that 30% of Canadians are aware of the CCTS. Some parties argued that this is insufficient, while the CCTS noted that it believes this is a high level of awareness for an ombudsman-type organization. This topic was discussed during the last review of the CCTS in 2016.

To have better data to assess any changes in Canadians’ experiences with misleading or aggressive sales practices and whether an early review of the CCTS is necessary, the CRTC expects the CCTS to track information related to these types of complaints and to reflect that information in its annual report, including instances where a Canadian who is not a customer reaches out to the CCTS on this topic.

Creation of a suitability standard

I don't want Canada's major telcomedia companies selling me what they want to sell me....I want them to sell me what I want from them, no matter how odd it may be. @RaginRonic

Replying to @cbcgopublic I am happy that this work is underway. I have seen my patients (older adults), many of them frail, cognitively impaired and socially isolated, pay for services such as internet that they did not even have. @vellani_shirin

The record of the proceeding includes several examples of consumers being sold expensive telecommunications services that appear unsuited to their needs or financial means. Several parties, notably the Fair Communications Sales Coalition, argued that some form of suitability test is necessary, possibly modelled on the “Know Your Client” rules in the investment industry.

Several of the Service Providers stated that a suitability assessment is already part of their sales process. They argued that it is in their interest for consumers to be sold the right services and services they can afford, in order to promote sales and customer satisfaction. These Service Providers criticized the investment industry's “Know Your Client” model as being cumbersome, invasive of consumer privacy, and disproportionate given the relative importance of major investments and telecommunications purchases. Further, they claimed that it is difficult to define what is suitable for a given consumer and what is not. According to the Service Providers, upselling is a normal part of the sales process, and consumers should be free to buy premium packages that exceed their minimum needs, if that is what they want to do with their money.

On the basis of the record, the CRTC is of the view that a streamlined suitability test would require sales representatives to turn their minds to the needs of a consumer and the affordability of the products and services being sold to that consumer. Any such test should have a minimal impact on the sales process, permit reasonable upselling, and result in a record that could be reviewed by the customer. It would be reasonable to expect that the Service Providers could consider implementing such a measure as part of their internal measures aimed at minimizing occurrences of misleading or aggressive sales practices, particularly when it comes to selling to consumers who may be more vulnerable.

The CRTC will consider investigating the necessity of a mandatory suitability test and what would be included in such a test, either in the context of a proceeding to implement a code of conduct or as part of a stand-alone process.

Testing the measures put in place by service providers on an ongoing basis

The CRTC has 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, the CRTC will consider:

Secret shopper research

The CRTC considers that secret shopper programs are an effective and feasible way to monitor the activities of service providers and to gather information on what issues are facing Canadians when they interact with service providers’ salespersons.

The usefulness of first-hand secret shopper research was clearly demonstrated in the intervention by Dr. Mary Cavanagh, Kristianne Anor, Sean Grassie, and Tara Hristov from the University of Ottawa (referred collectively to as Cavanagh et al.), who submitted the results of their research using their own first-hand secret shopper program to evaluate the exchange of information in the purchase of wireless services. They found that there were barriers to consumers being provided the information they needed (such as pricing, offers, terms and conditions, limitations, and clarifications) to make informed decisions in the pre-purchase stage in that market. Such barriers included salespersons’ reluctance to provide, or denial of requests for, written information the customer could take away with them; little use of follow-up questions by salespersons; uneven levels of salespersons’ knowledge of products or services; and salespersons providing information that was incomplete or difficult to contextualize. Rogers and Shaw indicated that they carry out their own secret shopper programs. In at least one case, a service provider’s secret shopper program appeared to have some results that were different from those of the research conducted by Cavanagh et al. The Service Providers did not file their secret shopper results or provide details on how their results varied from those of Cavanagh et al.’s study.

Given the importance of monitoring all service providers’ retail sales practices through research and reporting initiatives, and the impartial evidence that secret shopper programs can provide for that purpose, the CRTC will develop its own secret shopper program in the future, periodically targeting specific sales channels or locations across Canada. This program will provide insights into Canadians’ experiences with communications service providers. The CRTC intends to publish the results of the secret shopper program for consumers to use as another piece of information when making decisions about their communications services.

Reporting on complaints

Some parties suggested that the CRTC should require service providers to provide, within a year of this report, an updated report on the complaints they have received regarding misleading or aggressive sales practices.
Clear definitions and reliable data on complaints will assist the CRTC in assessing the prevalence of misleading or aggressive sales practices and better identifying problematic service providers or sales channels. Such complaint data could help the CRTC to more clearly identify where it should target its efforts to reduce misleading or aggressive sales practices and other areas of consumer concern.

The CRTC will consider what data should be submitted, if any, and on what basis.

Ongoing compliance and enforcement

The CRTC recognizes that enforcement of policies is paramount to ensuring that expected results are achieved. The CRTC notes that in the Review of the Wireless Code, it directed service providers to submit compliance reports on an annual basis, by 31 March of each year, to support its role in monitoring service providers for systemic non-compliance and enforcing the Wireless Code. The first cycle of the CRTC’s review of these compliance reports is currently underway.

The CRTC will closely monitor the effectiveness of ongoing compliance and enforcement efforts relating to the Wireless Code. Those measures that best promote compliance and better customer experiences will be considered for use in relation to misleading or aggressive sales practices.

Mandatory compliance measures

The CRTC will consider imposing mandatory compliance measures and enhanced public reporting measures on service providers that fall below a predetermined threshold of acceptable behaviour with respect to misleading or aggressive sales practices. These measures would remain in place until the service provider demonstrates a consistent ability to stay above the threshold.

The CRTC believes a targeted compliance effort would be an efficient and proportionate response to problematic sales behaviours exhibited by specific service providers. While all the Service Providers have internal measures to prevent misleading or aggressive sales practices, it appears that a few of them are not implementing those measures effectively on the front lines and are failing to adequately monitor compliance. There is a gap between these measures and Canadians’ experiences with misleading or aggressive sales practices. A targeted approach would allow the CRTC to deal with problems without penalizing service providers that demonstrate good practices and that are not the subject of complaints from consumers.

The threshold that would trigger mandatory compliance measures for a service provider could be linked to the elements of the CRTC’s consumer codes and other consumer protection measures that the CRTC identifies as key to ethical sales practices. The test of whether a service provider falls below any established threshold would be designed to allow for exceptions where an unexpected or unavoidable event (such as a major billing software failure or a natural disaster) causes a service provider to temporarily fall below the threshold.

For service providers that fall below the threshold of acceptable sales practices, the mandatory measures could include:

• public reporting of the service provider’s failure to meet the threshold of acceptable sales practices;
• third-party auditing of the sales practices process;
• filing of a sales practices improvement plan with the CRTC, including an auditable compliance program covering areas such as training, sales force monitoring, pre- and post-sale disclosures, suitability tests, pricing and rebate transparency, clarity in billing and contracts, etc.;
• requiring service providers to create an independent committee of the Board of Directors that would be responsible for monitoring ethical sales practices;
• quarterly reporting by this independent committee on the status of the service provider’s sales practices improvement plan;
• annual public reporting to the CRTC on the progress of implementing the sales practices improvement plan; and
• imposing administrative monetary penalties (AMPs) for failure to meet the minimum threshold of acceptable sales practices within a reasonable period.

In the CRTC’s view, the creation of a sales practices improvement plan and public reporting on a service provider's progress in implementing that plan would create an incentive for improvement and a road map to success. Public reporting would better enable consumers to make informed choices about the service providers they choose to do business with.

Some parties suggested that the CRTC should consider the regimes set out in the Financial Consumer Agency of Canada’s report entitled “Domestic Bank Retail Sales Practices Review” and proposed in Bill C-86 when considering an appropriate compliance regime. The mandatory compliance measures outlined above build on that suggestion.

Determining whether such a regime is necessary, and if so, what it would look like will require a future CRTC proceeding.

Addressing gaps in the awareness and effectiveness of existing consumer protections

The CRTC has found that there are gaps in the awareness and effectiveness of existing consumer protections. In order to address these gaps, the CRTC will consider:

Providing guidance to Canadians on who can help

Multiple levels of government, regulators, and organizations have rules relating to misleading or aggressive sales practices, each with different avenues for resolving complaints. Some parties argued that some consumer protection measures overlap such that it is not clear what rules and governing bodies apply. Furthermore, some raised concerns that the onus is on customers to know what the consumer protection rules are and who can help them when they have experienced misleading or aggressive sales practices. Every consumer protection organization has a responsibility to improve consumer awareness of its mandate and services.

When a consumer brings a complaint to the wrong consumer protection organization, there is an informal practice that may be applied to redirect the complaint to the appropriate body. For example, Bell Canada noted that when consumers complain to the “wrong body” (such as a provincial department or the CRTC), they will generally be redirected to the CCTS.

While this informal approach does result in positive outcomes on a case-by-case basis, the CRTC finds that there is an overall need for greater awareness so that consumers can better understand where to direct their consumer protection concerns and how the various government bodies, and non-governmental bodies such as the CCTS, can help.

The CRTC intends to create new consumer tools, such as a checklist that would be available on its website, to inform Canadians of the rules that apply and the organizations to which it would be appropriate to address a specific type of complaint. These tools would provide a road map of rights and remedies for Canadians who believe they have experienced misleading or aggressive retail sales practices by the Service Providers.

Creation of new codes of conduct

The CRTC recognizes that many communications services are now sold as bundles. In light of this trend, the CRTC considers that the consumer protections set out in its various codes may be more efficient and effective if the codes were harmonized and applied consistently to all services in a bundle. The CRTC will consider whether harmonizing its existing codes is warranted after the Internet Code proceeding is finished and any resulting code comes into force.

Sharing consumer protection best practices across Canada

There is a valuable opportunity for agencies and regulators at various levels of government that have a consumer protection mandate to learn from each other about the best methods for addressing misleading or aggressive sales practices. By sharing information about processes and policies, they could improve their practices, deliver better results for Canadians, and develop more consistent and predictable approaches to misleading or aggressive sales practices. Sharing analysis of emerging trends in misleading or aggressive sales practices could allow all agencies to react more quickly to practices of concern.

Over the long term, the sharing of best practices among consumer protection agencies and regulators could lead to changes in consumer protection laws, making it easier for Canadian consumers to understand those laws when they have a problem and reducing perceived gaps in protection or barriers to getting complaints resolved.

The CRTC intends to reach out to other consumer protection agencies and regulators at the federal and provincial or territorial levels so that engaged and willing agencies can share information and develop best practices related to combatting misleading or aggressive sales practices.

Best practices for service providers

In addition to the actions the CRTC can undertake (as outlined above), there are best practices that build upon the many different internal measures proposed by the Service Providers and other parties that are aimed at minimizing occurrences of misleading or aggressive sales practices. Some Service Providers submitted that they are going beyond what is required of them and that they have already implemented some of these best practices. The CRTC considers that many of the proposed internal measures could be considered best practices and suggests that service providers consider implementing these measures to address concerns about misleading or aggressive sales practices.

Availability of recorded calls or chat logs

Customers need to be able to verify that the service they are receiving matches the service they were sold; an efficient way to achieve this is for them to have access to a recording or transcript of their calls or chat sessions in a timely manner. Many Service Providers noted that this is already the case. However, some Canadians noted that they were not aware of this option.

The CRTC considers that customers should have access to the recordings or transcripts of their interactions with a service provider at no cost and within a reasonable time frame, and they need to be made aware that those recordings or transcripts are available. The CRTC further considers that service providers should evaluate whether their practices regarding recordings or transcripts are sufficient to reduce misleading or aggressive sales practices and to ensure that they review consumers’ calls promptly when assessing a complaint.

Regular reviews of internal measures

Some parties raised concerns about some of the practices and internal measures used by the Service Providers. The CRTC considers that the Service Providers should (a) conduct regular reviews to determine where failures occur in their internal measures’ mitigation of misleading or aggressive sales practices and (b) address those failures with regard to their sales force’s compensation scheme, their use of third-party sales agents, and all sales force policies and training materials, to ensure their effectiveness in minimizing occurrences of misleading or aggressive sales practices as intended.

The CRTC reminds the Service Providers of the Ipsos Report finding that instances where the customer feels they don’t have a choice about engaging in a sales interaction are the most frustrating. The CRTC notes that while customers may like in-home service, they may prefer it to take place based upon an appointment, rather than through a door-to-door interaction.

The CRTC considers that the voluntary implementation of a “do not knock” list, as discussed during the hearing, is a concrete action that the industry could take to show that it is taking Canadians’ concerns seriously.

Ensuring sales interactions meet the accessibility needs of Canadians

The Service Providers should consider how Canadians who may be more vulnerable due to their age, a disability, or a language barrier could be better empowered to make informed decisions about their services through the approaches used by the Service Providers. These approaches could include solutions such as tablets preloaded with sign language videos explaining key concepts being available in store fronts and kiosks, or training for sales staff about how to better serve these customers.

The CRTC considers that such efforts should be made through consultation with representatives of these segments of the population to ensure that the internal measures being developed are effective and appropriate.

Additionally, the CRTC finds that it is a best practice for service providers to offer accessibility plans in addition to general promotions and other offers. The CRTC expects service providers to adopt such an approach consistently for consumers requesting accessibility services and to ensure their salespersons are trained appropriately to implement these plans.

There were a number of other proposals made in the proceeding; however, the CRTC considers that more research by the appropriate governing bodies is necessary to properly assess whether or not these proposals would be effective or necessary.

Creation of a Telecommunication Consumer Organization

Several parties suggested that there needs to be a greater role for advocates on behalf of consumers. Impartial bodies with objectives such as handling complaints (CCTS) or adjudication and policy development (CRTC) cannot act as consumer advocates. Consumer interests may be better served by broad-based advocacy groups with stable funding to promote research and expertise.

Democracy Watch submitted that a Telecommunication Consumer Organization could be created based on the Citizen Utility Board model that exists in four U.S. states. It would be a federally chartered, non-profit organization designed to represent and educate consumers on telecommunications industry issues. It would advocate before industry regulators, the Government, and the courts for fair service from telecommunications service providers, and it would educate consumers on issues such as services, charges, and fees. This proposal was supported by some parties representing consumer interests.

Other parties submitted that the funding of existing consumer advocacy groups working on these issues would also be beneficial.

While the CRTC sees potential benefits to Democracy Watch’s proposal, the creation of such an organization does not fall within the CRTC’s mandate. The appropriate government bodies should gather further information to ensure that this proposal would be effective and to avoid overlap with the CCTS’s consumer complaints handling activities. These bodies could then determine whether the creation of such an organization is an effective means to address concerns about sales practices.

Administrative Monetary Penalties (AMPs)

Many parties suggested that the CRTC should consider applying enforcement mechanisms, up to and including AMPs, for instances of repeated non-compliance with existing consumer protections. The CRTC always considers AMPs on a case-by-case basis for non-compliance with service providers’ regulatory requirements, and it intends to maintain this approach. If the CRTC develops further regulations and tools to address misleading or aggressive sales practices (such as mandatory compliance measures), AMPs could be used to promote future compliance by service providers.

The CRTC notes that the Broadcasting Act does not currently contemplate the imposition of AMPs in cases of non-compliance with requirements under that Act, but that such a tool in the domain of broadcasting would make managing compliance more effective and targeted.

Wholesale concerns

Canadians may buy retail telecommunications services from service providers that purchase access to networks from wholesale service providers. Some of the retail Service Providers expressed concerns about the misleading or aggressive sales practices used by wholesale service providers (or their third-party agents) in interactions with their wholesale customers’ end-users. Some also expressed concern that salespersons may misrepresent another service provider’s offering – in other words, they accused the wholesale service providers’ representatives of trying to steer customers to their company’s own associated retail service. This concern was echoed by some Canadians who filed interventions or participated in the #CRTCforum during the proceeding, including the reporting of an alleged instance the week before the oral public hearing phase of the proceeding.

Other Service Providers submitted that they have seen these alleged actions over the years, but such actions are spoken about only in generalities during CRTC hearings. They also submitted that they have rules in place that should prevent these types of behaviours from happening. One Service Provider noted being aware of a single instance when misrepresentation may have happened.

The record of this proceeding is not sufficient to determine whether this issue is founded at this time.