Information provided during a sales transaction

The complaints

The Telecommunications Industry Ombudsman (TIO) receives complaints from consumers about the nature of the information they received from a telecommunications provider before they bought a product from that provider.

Note:

In this position statement, “product” refers to a good or service.

Consumers generally claim in their complaint that before they bought the product the provider’s representative:

• did not give them enough information about the product, or
• gave them incorrect or misleading information about the product or about an incentive to buy the product, or
• a combination of the above.

They also claim that they may not have bought the product if the provider’s representative had given them accurate information.

Note:

Other TIO position statements may be more relevant where complaints involve claims about an individual’s capacity to form a contract or about the age of the person who bought a product, i.e. that they were under 18. See the list of TIO Position Statements in the Contracts Index.

Scope of "information"

In this position statement, “information” means all information provided up to and including the point in time the consumer agrees to buy a product, i.e. the actual sale.

The information may be provided in the course of a verbal exchange between the consumer and the provider’s representative. It may also, or instead, involve the consumer reading documents published by or for the provider.

The information can be provided:

• during a telephone call
• during a door-to-door visit from a provider’s representative
• at a shop or other sales outlet where the provider’s products are sold, and/or
• via a website.

Examples of complaints

Example 1—telephone call A consumer claims they had a long telephone conversation with a provider’s representative about a product before they agreed to buy it during the same telephone call. They claim that the product they received is not the same as how the provider described it during the call. The provider produces a 90-second recording of the consumer agreeing to buy the product. It claims that nothing in this recording supports the consumer’s claims. The consumer claims that this is only the part of the call where they authorised purchase, and that the provider’s representative said much more about the product in the longer and earlier part of the call.

Example 2—telephone call A consumer claims that they told the telemarketer that before they bought anything they wanted information about the provider’s products and services. They claim the telemarketer prompted them to record their details so the provider could process this information request. They say that they were not sure about the recording when they did it because it sounded like they were agreeing to buy the product, but the telemarketer stopped the recording and told them that this was the way they processed information requests too. The provider produces a recording of the consumer agreeing to buy the product.

Example 3—sales outlet A consumer claims that the provider’s representative in the shop where they bought a mobile phone did not tell them something important about a mobile phone before they bought it. The provider produces a checklist signed by the consumer. The important information is on this checklist. The box next to this information is ticked. The provider says that the consumer would not have signed this checklist if they had not been given the important information. The consumer claims that the provider’s representative had ticked the items on the checklist, and asked them to sign it already ticked.

Example 4—door-to-door visit A consumer claims that they told a provider’s door-to-door sales representative that they did not want to buy anything that day. They claim that they signed a form, but only so the door-to-door representative could prove to their employer that they had visited the premises as part of their sales work. The provider produces a contract for a product containing the consumer’s signature. It claims that it does not have information request forms.

Example 5—website A consumer claims that a provider’s website offered free benefits for signing up for internet access for a period of 12 months or more. They claim that the offer did not contain any disclaimers or limitations. They claim that, after they signed up for internet access on the basis of the offer, the provider told them it was no longer offering the free benefits. The provider claims that its terms and conditions allow it to withdraw and/or limit the nature of the free benefits at any time. Note: when investigating such claims, the TIO would also have regard to its position statement, Use of marketing terms such as capped, unlimited and free

Core position

The TIO takes the view that telecommunications providers should provide consumers with sufficient information about a product to allow them to make an informed purchase or to give their informed consent when they agreed to buy the product. For this reason, when the TIO investigates a complaint of this type, we collect and assess the records of the sales transaction.

The main question that guides our collection of information and assessment of a complaint is:

In this instance, would the information have been likely to lead a reasonable and ordinary member of the public with little or no knowledge about a product to either form an incorrect impression of a product or be misled about it?

It is the TIO’s view that providers are well placed to record and store comprehensive records of the information they provide to consumers during a sales transaction, if the information provided is likely to lead to the consumer buying a product.

Further, it is the TIO’s view that providers should retain such records for a reasonable period of time. For example, it may be reasonable for a provider to keep the transaction records relating to a fixed term contract until the end of the contract period.

Information the TIO collects during an investigation

Telephone recordings

For complaints where a consumer has bought a product during or as a result of a telephone call, the TIO asks the provider for complete recording(s) of all verbal exchanges between the provider and the consumer up to and including the sale.

We take the view that it is not enough for a provider to give us:

• a recording of the part of the call when the consumer agrees to buy the product, also known as the “voice signature”, and
• one recording of one call, if the consumer claims there were several separate calls, e.g. calls about terms and conditions of an offer.

We ask for complete recording(s) so we can assess the information the provider gave to the consumer at different points in the process.

If the information a provider gave a consumer during a verbal exchange (or multiple verbal exchanges) is not consistent at different points in the process, we would then consider whether this increases the likelihood that a consumer may not have given their informed consent to the provider when they agreed to buy the product.

Records of in-person communication

For complaints where a consumer has bought a product during or after a meeting with a provider’s representative at a sales outlet or the consumer’s home or place of business, the TIO asks the provider for:

• a formal, signed statement from the sales/door-to-door sales representative who spoke with the consumer. In this statement, the provider’s representative should write everything they remember about the information provided to the consumer up to and including the sale, and
  
  
• a copy of the representative’s identification so we can verify their signature.
  

Other information

As well as the complete recording(s) or formal written statements discussed above, the TIO may also ask for other information, from either the provider or the consumer, including:

• advertisements for the product
  
  
• any written documentation about the product (including archived and current website pages), and whether and when the provider gave or made this available to the consumer
  
  
• the date or dates of the sales transaction
  
  
• the type of service
  
  
• the start- and end-dates of the contract period, if it is a fixed term contract
  
  
• the provider’s system records/notes, including records of any complaints about the product (bearing in mind that a lack of records does not necessarily mean that the consumer did not make complaints)
  
  
• to supplement the TIO’s record of the consumer’s claims, a formal, signed statement from the consumer detailing everything they remember about the information provided by the provider up to and including the sale
  
  
• statements from any witnesses
  
  
• where the consumer’s circumstances may have affected their ability to understand the information provided to them, appropriate documentation to support any claims about those circumstances
  
  
• information about the consumer’s actions after they bought the product, including call and internet usage records, and/or
  
  
• the number of verbal exchanges the provider’s representative had with other consumers that day/week and/or since that day (or the average number of exchanges they would have had).

Assessing the complaint and deciding on a fair and reasonable resolution

Standard assessment

When the TIO assesses the merits of a complaint and the reasonableness of a proposed resolution, our aim is to decide whether the information provided by the provider to the consumer may have led the consumer to form an incorrect impression of a product or be misled about it.

We do this by:

• assessing and comparing the parties’ versions of events and the information collected, with particular regard to:
  
  
  • the content and consistency of the sales message and product offer, e.g. what was it at different points in the process? did it change as the interaction proceeded? if so, in what way, within what time-frame and how close to the moment the customer agreed to buy the product?
    
    
  • the level of detail in a consumer and provider’s statements
    
    
  • for recorded exchanges, the representative’s pace, pitch, intonation, and the accessibility of the words and concepts they used, and
    
    
  • whether the consumer’s actions after they bought a product were consistent with the information they claim the provider gave them before the sale, e.g. do call records show that the consumer made more calls during the periods they claim the provider said they could make free calls than at other times
    
    
• assessing what information ought to have been provided to the consumer to secure their informed consent, having regard to the nature of the product, any needs that may have been indicated by the consumer or the purpose for which the consumer required the product
  
  
• taking into account any particular circumstances of the individual consumer that may have affected their ability to understand the information provided to them, e.g. whether they are from a culturally and linguistically diverse community, and
  
  
• considering relevant industry regulations, other TIO position statements, legal principles and notions of fairness and reasonableness.

Assessing a complaint if a provider does not supply information

The TIO will consider all other available information and take all relevant factors into account if a provider does not supply complete recording(s) of all relevant telephone calls or a comprehensive, signed and verifiable statement from the sales outlet or door-to-door representative.

The TIO will also take into account whether a provider took steps to obtain statements/records when it first became aware that its customer was concerned about information provided before and during a sale.

Fair and reasonable resolutions

The fairness and reasonableness of any proposed resolution to a complaint depends on the particular circumstances of that complaint.

If the TIO decides that information provided during a sale would have been likely to lead a reasonable and ordinary member of the public with little or no knowledge about a product to either form an incorrect impression of a product or be misled about it, then possible resolutions may include:

• releasing the consumer from a fixed term contract without penalty
  
  
• reversing the consumer’s service to a previous provider and, if relevant, compensating them if they cannot regain the benefits they had before
  
  
• refunding some or all the money a consumer spent to buy and use a product
  
  
• returning equipment to the provider (at no cost to the consumer)
  
  
• taking other appropriate action to ensure the consumer is no worse off than before the events that led to their complaint, and/or
  
  
• providing the consumer with a product that meets their requirements (though not necessarily at the same cost or under the same terms/conditions).

Relevant law and industry codes

Some law and industry codes refer to the issues discussed in this position statement:

Australian Competition and Consumer Commission v EDirect Pty Ltd [2008] FCA 65 (12 February 2008) http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/federal_ct/2008/65.html

Fair Trading Act 1999, Victoria- Section 67D http://www.austlii.edu.au/au/legis/vic/consol_act/fta1999117/s67d.html

Telecommunications Consumer Protections Code, Chapter 4 - Customer Information on Prices, Terms and Conditions

Telecommunications Consumer Protections Code, Chapter 8 - Customer Transfer

First posted: 14 April 2008
Last updated: 12 May 2008