Telcos called out for questionable sales practices

Australian telecommunications service providers incentivising their customer-facing staff to focus on sales over customer satisfaction are potentially exposing consumers to unethical sales practices.

This was the conclusion of a new exploratory report published by consumer advocacy body the Australian Communications Consumer Action Network (ACCAN).

The report, based on interviews with former employees of Telstra, Optus and Vodafone, identified the presence of financial incentive systems built around sales targets, sometimes at the expense of customer service and satisfaction.

ACCAN CEO Teresa Corbin said the report was commissioned based on a number of complaints relayed to ACCAN from consumers who had been sold plans and products that were more expensive than expected, or were beyond their financial means.

“This research tells the story of team members who were under intense pressure to meet sales targets. This has the potential to create an overly competitive culture where the sale comes first and consumers’ needs are an afterthought,” Corbin said.

In addition, the industry has been pushing tactics such as upselling or cross-selling (the sale of related products or services such as handsets or accessories). According to the report, this has resulted in questionable selling tactics such as leading consumers into thinking that staff recommending a product use that product themselves.

Customer service representatives interviewed for the report indicated that customers that are less informed or more unsure about what to buy tend to be easiest to sell to. Corbin said the interviews left some suggestion that such customers may be taken advantage of in sales situations.

The report also found that pressure to hit sales targets often leaves employees feeling like they have inadequate time to help existing customers with their service or technical inquiries.

Finally, the report found indications that customer service representatives may be inadequately trained on the consumer protections available for customers, with only half of respondents recalling receiving training on the Telecommunications Consumer Protection Code.

Corbin said the research not only raises questions about the effectiveness of the safeguards, but also whether ACMA has the tools in place to intervene to tackle systemic issues. ACCAN is calling on the regulator to launch a formal investigation into the issue of selling practices and the impact on consumers.

“As we’ve seen this week with the formal warnings issued to telcos who violated their responsibilities to provide information to consumers with disability, investigations by the ACMA can have a tangible impact on consumer safeguards,” she said.

“We hope that this report will create the opportunity for us to have a constructive dialogue with the telco industry, so that we can ensure that consumers are protected against questionable selling practices.”

Meanwhile, ACCAN is urging the telecommunications industry to adopt reforms including restructuring sales incentives around the best interests of the customer, a ban on unsolicited upselling and the introduction of responsible credit assessment practices at point of sale.

Image credit: ©iStockphoto.com/Robinpd

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