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Misleading advice of a provider’s identity

31 October 2011

Our systemic investigations team has observed an increase in the number of investigations it conducts about potentially misleading sales practices which involve misrepresentations about the service provider’s identity. Typically the investigations involve claims that consumers have been telemarketed by someone who they believed represented their existing service provider or represented a large service provider offering wholesale services. Service providers who do not ensure that they clearly identify themselves during telemarketing calls risk breaching sections of the Telecommunications Consumer Protection Code and the Trade Practices Amendment (Australian Consumer Law) Act (No.1) 2010.

Where the TIO’s systemic investigations team is alerted to this kind of issue, they will usually review all complaints received about the provider in question, looking for patterns and trends. They may also review media coverage, or contact consumers seeking further information. If this information is cause for concern, they contact the service provider asking them to provide their view on things, together with supporting evidence such as sales scripts or recordings of sales transactions.

The results of the TIO’s systemic investigations have included:

  • amendments to sales scripts so that the information provided to consumers is clearer
  • the termination by service providers of relationships with rogue sales agents
  • improvements to service providers’ record keeping practices.

Based on the TIO’s recent investigations, we can make the following observations which may be of assistance to service providers considering telemarketing consumers:

  • First impressions count
    If a consumer is confused about where a telemarketer is calling from at the start of the conversation, it is probably not going to be enough to include a comment such as ‘You understand that Telco X is separate from and not affiliated with Telstra in the verbal transfer authorisation along with other terms and conditions. There is a lot of information for consumers to take in during this transfer authorisation stage of a transaction.
  • Don’t forget to use your name
    The TIO has received complaints from consumers where our investigation found that providers did not mention their own name during the initial sales pitch, but did make comments such as ‘with us, your lines will stay with Optus’ or ‘Telstra Wholesale will come and fix any problems you have’.  While the comments may be technically correct, the overall impression may be confusing to a consumer.
  • Record the whole conversation
    It is good practice to keep a recorded copy of the full sales transaction rather than just the verbal authorisation. That way, if there is any dispute later, the service provider has the full conversation to refer back to.
  • Review the whole recording before arranging a transfer
    The TIO has observed practices where service providers transfer services and then review the recording of the sales transaction. This means that if they find a recording in which the consumer has not given consent, they have already performed an unauthorised transfer.
  • Confused customers cost you money
    The TIO generally expects service providers to waive all charges, and assist the consumer to transfer back to their original service provider, in circumstances where they have not received the authorised consent of the account holder to the transfer.

Faulty landlines

Case Study - Richard

The owner of a telemarketing business contacted us to make a compensation claim for lost profit.

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