GATINEAU – If we may paraphrase some of the reaction by TekSavvy, Tbaytel and Eastlink representatives Wednesday morning in front of the CRTC it would be: "It seems strange to mandate us to continue being nice to our customers."
These three smaller independents (respectively, a wholesaler, a municipally owned telco and a regional wired and wireless carrier) also all had the same story to tell when it came to the dubious sales practices which have been so far outlined by consumers during the CRTC’s Telecom Sales Practices hearing this week in Gatineau: “It ain’t us.”
As often happens in public proceedings like this, however, the same questions are repeated to most intervenors, leading observers like us to jump to conclusions such as how it looks quite likely there will be some sort of new code of conduct for carriers after this is all done (well that, coupled with ISED Minister Navdeep Bains telling reporters earlier this week he’s actually looking forward to such a code).
However, while the lines of questioning reveal the direction in which the Commission is steering the ship, they also show some things upon which it hasn’t yet decided – such as just what counts as a too-aggressive sales pitch and whether or not telecom companies should engage in some sort of suitability test when signing on customers for products and services.
The two are definitely related.
The four smaller independent operators which appeared today, along with Northwestel – also small and serving a rural area and owned by Bell – told the Commission similar things when asked what a new code of conduct should say about aggressive and misleading sales tactics and how to properly figure out which service level is suitable for which customer.
“We do that already,” they said (again, we’re paraphrasing). How, they were asked? “We listen.”
The independent operators are concerned, however, that any new code not impact their operating expenses. “The concern we have is there will be stated obligations… which will create whole new cost system changes we might need to create, when were already complying with the principle in practice,” said Eastlink vice-president, regulatory Natalie MacDonald, echoing the concerns of the others.
Suitability
THE FAIR COMMUNICATIONS Sales Coalition (PIAC, ACORN, CARP and NPF), was the first to lobby for a suitability provision in its original submission to the CRTC for this proceeding. The group noted the financial services industry requires Canadian Securities Administrators only sell financial products to clients that make sense for their situation and that they can afford.
“A registrant must take reasonable steps to ensure that, before it makes a recommendation to or accepts an instruction from a client to buy or sell a security, or makes a purchase or sale of a security for a client’s managed account, the purchase or sale is suitable for the client,” reads the FCSC intervention, quoting CSA regulations.
Commissioners seem clearly interested in finding some kind of suitability standard to which everyone can agree and rural broadband provider Xplornet showed it is well down this path. The company is already doing just that, because it must.
As a satellite and fixed wireless provider serving Canadians often very far and wide, Xplornet doesn’t have the same network capabilities of an urban fibre or coaxial network. It needs to know when speaking with a customer who could be literally anywhere in Canada exactly what their requirements are. Are they emailers and surfers, or do they need Netflix in 4K? Do they upload tons of video to YouTube, or just communicate with friends and family on Facebook? How many people are in their home? How many devices?
Plus, Xplornet offers a 30-day money-back guarantee – so they had better probe the potential customers for their suitability because it’s an expensive proposition to reclaim all of its gear and give up a new subscriber.
“Xplornet’s sales team does not receive a commission for selling a more expensive service than the customer requires, and there is no financial incentive to upsell or oversell customers,” said the company’s vice-president of direct sales Lisa Jones Keenan (pictured in a CPAC.ca screen cap). “The customer can also call within the first 45 days to adjust the size of their package if it is too big or too small.”
The other independents and Northwestel told commissioners they ask similar questions of their customers and their reps are under instructions to only offer a service level which matches stated needs, although none offer the 30-day money-back guarantee Xplornet does. TekSavvy’s COO Pierre Aubé told the hearing its representatives’ calls are not timed, they have no sales targets and are to respond “based on what the consumer is asking them” taking as much time as needed.
“It might incentivize competitors to be more aggressive during that period to win back customers.” – Natalie MacDonald, Eastlink
According to many of the customer complaints driving this hearing, as we’ve reported, the large providers too often don’t spend enough time verifying which of their plans might be suitable for each customer and instead push the most expensive ones first, saddling some with services they don’t want or need and then who have no way out if they’ve signed a contract.
Commissioners have also been probing companies for their thoughts on trial periods or grace periods where customers can back out of signed contracts after a short period of time. The Wireless Code already calls for a 15-day grace period and commissioners have been asking how to extend that to broadband services.
There are some challenges to that however. Broadband connections often come with expensive in-home tech and the companies appearing Wednesday warned the commissioners that it would be difficult to walk away from such costs and to consider that potential impact as they deliberate.
Also – when customers switch to an Eastlink, or Teksavvy, they often leave one of the larger providers, who may well then use that grace period to offer too-good-to-be-true deals to convince the customer to stay. “It might incentivize competitors to be more aggressive during that period to win back customers,” cautioned MacDonald. (Ed note: An example of possible unintended consequences?)
Aggression
WHAT’S AGGRESSIVE, OR too-aggressive of a sales pitch? We’ve heard a number of responses to this so far and it’s clearly something with which the Regulator is still grappling. “Aggressive” can be in the eye of the beholder, and most who’ve appeared so far have said they know a line-crossing sales pitch when they see it.
The government’s order-in-council which made this hearing happen talks instead of “high-pressure” sales tactics, not aggressive and, thanks to tweeter and lawyer Bram Abramson, it’s worth noting there are governmental definitions on the books which define the word in this context.
However, the best definition we’ve heard so far came Tuesday from the Consumers Council of Canada’s Howard Deane. He said simply when a customer is forced to be mean to stop a sales pitch, that’s when it crossed a line. “Aggressive would be a situation where… you cause somebody to be rude when they otherwise wouldn't be,” he said.
That might be hard to codify, but we like that definition. The companies appearing Wednesday agreed that when a customer says “no” their reps are coached to take that answer, as should all companies’ sales agents.
Tbaytel’s president and CEO Dan Topatigh went even a step further saying the careless act of not listening to a customer’s concerns “can be construed as aggressive.”
Thursday we will see what the larger carriers think of these ideas and others (not to mention the accusations leveled against some of them), as Quebecor, SaskTel, Cogeco and Telus face the Commission.
