Are Aussie Telcos Doing Enough To Protect The Financially Vulnerable? ChannelNews Investigates
Last week, Telstra’s ‘unconscionable’ pattern of signing Indigenous customers to post-paid mobile contracts they could not afford nor understand was slammed by Australia’s consumer watchdog, the ACCC.
Between 2016 and 2018, the billion-dollar telco giant used exploitative sales tactics on 108 Indigenous customers across Western Australia, South Australia and The Northern Territory.
Telstra admitted staff at the five stores took advantage of having a substantially stronger bargaining position when signing up customers who spoke English as a second or third language, had difficulty understanding contracts or were either unemployed or relied heavily on benefits or pensions.
In some cases, staffers even falsely represented the products as being “free”.
Telstra is often the only mobile network in remote, rural areas and Australia has limited consumer choice when it comes to mobile and broadband providers.
This leaves open the opportunity for telco giants to take advantage of some of our country’s most financially vulnerable people: The elderly, remote-based Indigenous people or welfare recipients.
In Telstra’s case, some of the customers were saddled with thousands of dollars in debt after months of being unable to afford expensive mobile plans. The average debt per consumer was more than $7,400.
After learning Telstra effectively had zero systems in place to stop products being pushed on the financially vulnerable, Channel News approached Australia’s biggest mobile network providers about their ethical practices.
So does this happen more than we realise?
Telstra rival Optus says it has a number of policies in place to support and protect financially vulnerable members of the community, and points out there are checks and balances that should and would stop a staff member signing up a customer who cannot understand or even afford a mobile product.
“Optus acknowledges that inappropriate conduct can cause serious financial hardship for customers, which is why we ensure our staff follow strict policies and procedures to help them act appropriately,” an Optus spokesperson told Channel News.
“Optus ensures staff are appropriately trained to understand the relevant laws and ethical procedures when interacting with our customers. We make sure staff run-through the appropriate check and balances before signing-up customers to any of our plans or products.”
Optus, which posted $637 million for the half-year ending September 20, says it will refund products and charges for any sales it deems “inappropriate”.
“If the outcome of the investigation is that a plan or product has been inappropriately sold – then we will waive all associated fees and charges and offer our sincerest apology,” the company added.
Fellow Australian telco Aussie Broadband was firm in their position that staffers would never compel a financially vulnerable customer into signing a contract or buying a mobile product.
Co-founder and Managing Director Phillip Britt says Aussie Broadband has strict measures in place to ensure staff members know how to interact with disadvantaged customers.
“We refer to the ACCC Compliance Guide “Don’t take advantage of disadvantage”. This guide provides useful information for any businesses dealing with disadvantaged or vulnerable consumers,” Britt told Channel News.
“At Aussie Broadband, one of our strongly-held values is “be good to people”. We understand that there are times when people may have trouble paying their bills. So, we are committed to helping any customer facing financial hardship to retain their internet/phone access and working with them to find a sustainable solution.
We don’t offer lock-in contracts, so our customers can leave at any time. We have a range of measures for customers who are doing it tough, including payment plans via the MyAussie app.”
Aussie Broadband doesn’t have in-store staffers – but invests heavily into training employees on financial and social ethics.
“We’re developing an ethics/social citizenship training module for all staff, in addition to the specific training we do for financial hardship,” Britt added.
Many telco staffers face pressures themselves from their employers to oversell and ‘add on’ products to customers, regardless of their financial position.
But Aussie Broadband combats this by not basing renumeration on upselling.
“In line with our “Be Good to People” value, our sales staff remuneration is not dependent upon overselling to customers,” Britt said.
Vodafone, which is part of the TPG Telecom group in Australia, responded briefly to Channel News questions regarding ethical sales and financially vulnerable customers.
Vodafone says it takes responsible selling very seriously and ensures staff members are trained to conduct credit checks on new and upgrading post-paid customers.
“Our frontline staff undergo regular training to ensure they understand their responsibilities when selling products, especially to vulnerable or disadvantaged customers,” a spokesperson told Channel News.
“Our products are also designed to ensure customers are in control. Our no lock-in contracts mean customers can change their plan at any time, and their plan isn’t tied to a device contract.”
Channel News also reached out to Dodo for comment but has not received a response.
Telstra admitted it has breached consumer law faces a $50 million fine after the ACCC vowed to take the telco to court.
In response to the breach, Telstra CEO Andy Penn apologised for the company’s failings.
“I have spoken often about doing business responsibly, including about these failings, since earlier this year. I am determined we have a leadership position and hold ourselves accountable in this regard,” he said.
“While it was a small number of licensee stores that did not do the right thing, the impact on these vulnerable customers has been significant and this is not OK.”
“We have taken steps to provide full refunds with interest, waived debts and allowed most customers to keep their devices to help make things right.”