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Report on Business ‘They are harming Canadian consumers.’ CRTC confirms Canadian telecom industry engages in misleading sales practices

The CRTC has acknowledged that Canada’s telecom providers engage in misleading or aggressive sales tactics that harm vulnerable members of the public and says it will take steps to stop those practices.

The federal government last year directed the Canadian Radio-television and Telecommunications Commission to hold a public hearing on sales practices – after the regulator first refused to look into the matter – and it published a report Wednesday. The report included suggestions for new measures such as forcing internet, television and wireless service providers to provide a presales quote or enforcing trial periods that would allow customers to cancel services that don’t match up with what they were offered.

“[Inappropriate sales practices] occur to an unacceptable degree; they are harming Canadian consumers, in particular vulnerable Canadians; and they are a serious concern for the CRTC,” the report said.

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Consumer advocates said the report was a significant acknowledgment of the concerns of many customers, particularly older Canadians, people with disabilities and those with language barriers. But most of the changes the CRTC recommended will require follow-up proceedings and the report set no specific timeline for those steps, leaving some questioning why the commission isn’t doing more now.

“Unfortunately, what we really needed today was action to stem the bad behaviour – and that’s not what the CRTC delivered,” Laura Tribe, executive director of internet advocacy group OpenMedia said in a statement. “In an ongoing game of hot potato, it seems everyone has ideas, but no one is willing to take action. Without financial penalties to offenders, or concrete next steps to hold them accountable, what protections do Canadians really have?”

CRTC chairman Ian Scott said the process of reporting back to the government was not meant to lead to a final decision or ruling at this time.

“I know there will be some impatience or frustration with the answer,” he said in an interview, adding, “This report to the minister is the beginning of a process, not the end of a process.”

Mr. Scott said the proceeding, which included a week-long public hearing in October, revealed that telecom providers have “lots of protections and policies and practices in place” to prevent aggressive or misleading sales practices, but such practices still happen.

“That’s why I say the onus is on service providers. Clearly their policies are either insufficient or not being applied appropriately and that needs to change, and it will.”

From the archives: ‘Managing the decline:’ Canada’s cable companies fight to stem losses as Big Tech encroaches

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Navdeep Bains, Minister of Innovation, Science and Economic Development, directed the CRTC to hold a public hearing after a series of stories by the CBC highlighted allegations of mistreatment, including inappropriate upselling of services consumers did not need. Mr. Scott said Wednesday one story that stood out to him during the hearing was of an elderly Canadian who was sold two high-speed internet packages and did not even have a home computer.

“I thank the CRTC for its work and the range of actions being considered to respond to these issues,” Mr. Bains said in a statement on Wednesday. “We will review the report’s recommendations, and look forward to concrete solutions being put in place. We are committed to taking action to address this issue.”

Representatives for BCE Inc. and Rogers Communications Inc., Canada’s two largest communications providers and the subjects of many of the complaints in the CBC reports, both said separately on Wednesday that they look forward to working with the CRTC on the issue.

“We are committed to being clear, simple and fair with our customers in every interaction,” said Rogers’s Sarah Schmidt, while BCE’s Marc Choma commented, “Bell is always focused on improving the customer experience … and providing services to suit all customer segments.”

Telus Corp., Canada’s third-largest wireless provider, said it “does not tolerate unethical or aggressive sales practices, period,” and believes it should not have been included in the same category as its rivals. “We are disappointed that the CRTC did not differentiate between those carriers who appear to frequently engage in these aggressive and misleading sales practices and those, like Telus, who do not,” said Zainul Mawji, president of home and small business solutions.

During the hearing, BCE said it received more than 54 million calls from customers over a one-year period and that just over 24,000 of those were complaints about sales practices, while Rogers said it had 60 million customer “interactions” and 2,200 sales complaints. Telus did not publicly disclose how many complaints it received about sales practices.

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Mr. Scott would not provide a timeline on when the CRTC would kick off future proceedings to implement the possible solutions it highlighted in the report, but said, “we’ll do it as quickly as possible.”

The CRTC noted it is already working on a new code of conduct for internet service providers (it already has codes of conduct for wireless and television services). Mr. Scott said that once completed, it is possible all of the CRTC’s codes could be combined into one.

The report also highlighted the work of Mary Cavanagh, associate professor in Arts at the University of Ottawa, and a group of students who posed as mystery shoppers at wireless retail outlets and found great difficulties in getting clear information on the terms and price before making a purchase decision. The CRTC said it plans to implement its own secret shopper program.

In an interview Wednesday, Ms. Cavanagh said she was pleased to see the research recognized and that the CRTC, “Seemed to have heard the complexity of problem, how there are no easy answers and that systemic change is needed.”

She said consumers should “be vigilant and raise the bar on your expectations, because the government has told you to expect better and your question should be ‘When and how will that happen and how will I know that it is better?’”

John Lawford, executive director of the Public Interest Advocacy Centre, first asked the CRTC to launch an inquiry early last year but the commission rejected his request at the time. He called the report Wednesday “very gratifying,” noting that “consumers don’t always get anyone believing them they have problems with major industries.”

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In a research note to clients, Desjardins Securities analyst Maher Yaghi said while companies do not like increased regulation, some of the steps proposed by the CRTC “may be a good thing for the sector.” He noted they could lead to lower customer complaints and possibly reduce the rate of subscriber turnover, a perpetual concern in the telecom industry as winning new business represents an added cost.

Editor’s note: Feb. 21, 2019: Mary Cavanagh is an associate professor in Arts at the University of Ottawa. This online story has been changed from an earlier version.
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