Sales practices towards vulnerable indigenous customers

The Issue

In October 2018, the Telecommunications Industry Ombudsman commenced a systemic investigation into the selling practices of a particular Navy Telco* store. We had identified at least 15 similar complaints about the same store. The complaints were about Navy Telco staff selling multiple post-paid plans and devices to indigenous consumers who all presented with certain vulnerabilities, such as low language and literacy skills. The financial counsellors representing these consumers told us their clients disclosed to Navy Telco their only source of income was a Centrelink pension. The consumers were sold additional devices when they already had a debt on their account, and it was clear they were not going to be the end user

The Investigation

Navy Telco has acknowledged employees at this store were engaging in “unusual behaviours” not in line with its standard processes. These behaviours included employees attempting to connect services where the credit assessments had been declined and attempting to bypass credit assessments by manipulating customers’ details. Navy Telco said it had issued a formal breach notice to the store licensee, took back sales remuneration and terminated some employees. Navy Telco also introduced a number of measures “to ensure the store is engaging in fair sales practices and providing telecommunications products responsibly”. We are still working with Navy Telco on this matter, including about customer remediation steps.

The Outcome

More broadly for all of its stores, Navy Telco told us it has started to employ new control mechanisms, such as sales interaction audits and being able to take back remuneration. Sales consultants are also trained to ensure they are appropriately skilled and sales behaviours are scrutinised regularly.

*Name of individuals, organisations and companies have been changed