OPENING REMARKS

by Mary Cavanagh, Kristianne Anor, Sean Grassie, and Tara Hristov in Telecom Notice of Consultation CRTC 2018-246: Inquiry regarding the retail sales practices of Canada’s large telecommunications carriers

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October 23, 2018

1. [MARY CAVANAGH] Good afternoon, Mr Chairman, Commissioners, Madam Secretary. My name is Dr. Mary Cavanagh. To my left is Kristianne Anor; to her left is Tara Hristov; and to my right is Sean Grassie. Thank you for the opportunity to bring our research perspective to this hearing on sales practices.
2. I am a professor at the University of Ottawa’s School of Information Studies. Tara, Kristianne and Sean are JD students at the Faculty of Law. Our intervention is based on phase one of our research – where we begin to map wireless consumers’ everyday information seeking practices using face-to-face mystery shoppers as the primary point of entry.
3. At the core, we follow the red thread of information through the wireless marketplace and 3 types of consumer-service provider interactions. Those are pre-purchase, signing the contract, and post-purchase. This logic applies equally to other telecom consumer interactions such as home internet and home phone.
4. Our comments today primarily respond to Section 2 of this Inquiry on misleading or aggressive sales practices that, in your words, are understood to include “incomplete, unclear or misleading information regarding service terms and conditions.” For the sake of emphasis, let me repeat this key phrase: “incomplete, unclear or misleading information” by service providers [SPs]. We also connect the Inquiry’s questions about sales practices to the Wireless Code’s stated requirements to “ensure that consumers are empowered to make informed decisions about wireless services … and to contribute to a more dynamic marketplace.”
5. We will use our time to draw your attention to what we see as a fundamental problem in this marketplace relationship from the consumer’s perspective. We assert that pervasive, structural, and systemic information barriers exist in the pre-purchase stages of this marketplace, making it virtually impossible for consumers to be effectively informed. Meaningful, context-specific information is the currency of empowered consumers. That’s our working hypothesis drawn from a substantial body of existing research.
6. And what do we mean? Information is meaningful and credible if first it responds to the specific social contexts in which it is being sought and communicated. Information is meaningful within and across those settings if it is also objectively considered to be accessible, trustworthy, reliable, consistent, authoritative, andrelevant. These values become consumers’ evaluation criteria and can be translated into a wide array of documentary standards and assessment protocols.
7. Our mystery shopper data collected in 2016 and again in 2018, conducted in the Ottawa-Gatineau region, indicates that there are two ways kiosk-based SPs consistently undermine a consumer’s ability to become informed for effective decision-making. The first relates to the quality of communication interaction itself. The second relates to the pervasive refusal to commit the verbal pre-contract shopping information and communication exchange, into a meaningful documentary or explicit form that a consumer can take home.
8. We designed our mystery shopper study around two pre-purchase scenarios using our own comprehensive checklist developed from the Wireless Codeprovisions supporting empowered and informed consumers. The first scenario is based on purchasing a device AND a plan; the second is on purchasing a plan only. In the first scenario consumers should receive information on the following elements: general pricing, comparable offers, unlimited services, data caps, zero-rating, roaming, device subsidy, unlocking, warranties, early cancellation fees, trial periods, security deposits, lost or stolen devices, repairs, disconnection or contract extension, and optional services. 15 topics in all, about which an informed consumer could likely have multiple clarifying questions. In the second plan-only scenario, 11 of those topics are relevant.
9. We visited two separate kiosks belonging to each SP for each scenario; and found virtually no consistency within the same SP and across SPs, in the quality of the information that was conveyed.
10. What was consistent across all SPs, however, were the topics that were never mentioned at all. 50-75% of the topics from the checklist were never mentioned, despite prompts by the shoppers themselves. Is it misleading or misinforming behaviour to remain silent regarding cancellation fees, warranties, or roaming charges, for example? In studies of information deception, the practice of omission figures prominently.
11. We also found that the quality of the information interaction was unrelated to the busyness of the kiosk. More than half the 2018 interactions (13/24) took place in kiosks that were otherwise empty or with no waiting customers. In the majority of these interactions, staff were equally silent on the same information topics, and similarly unforthcoming in the depth and clarity of the information they did provide.
12. In comparing our 2018 results with our 2016 data, we find that the trend line is going in the wrong direction – that is, SPs provided less information and poorer quality information in 2018. What we conclude from these results, albeit a small sample, though echoing many other responses to this Inquiry, is that the SPs often do not meet minimum requirements for provision of meaningful information, and do not communicate effectively in these f2f pre-purchase interactions.
13. Without referring to your notes, how many of the 15 Wireless Codeinformation topics I mentioned a few moments ago can you recall? Just the topics themselves, no details, no if-and or if-but statements, no reference to gigs, pricing bundles, or plan conditions, that might eventually appear in the contract fine print. Virtually impossible. And we are the super-experts.
14. Research indicates that irrespective of age or education, human beings are very poor at retaining complex information packets delivered only verbally, and only once, in a vocabulary that is not already somewhat familiar. Information seekers validate the information credibility of a given shopping interaction, using a complex string of source cues, media and cognitive heuristics. In the current climate of fake news, bad science and general information fakery, more than ever, we need all the avenues at our disposal, to evaluate the information we are being sold in a given context. Evaluation techniques and tools exist but these are based on the premise that there is an information object, a thing, a container, beyond the human sender and receiver, holding the content to be assessed.
15. We assert that via the Wireless Code, the Commission has encouraged consumers to expect they have a right to receive meaningful, and to some extent, marketplace standardized information touching on at least 10 topics, before (and after) signing their purchase contract. The corresponding responsibility of consumers to inform themselves obviously depends on having a contextualized complete package of pre-purchase information to assess.
16. The second way our findings suggest SPs appear to systematically subvert the quality and effectiveness of the information interactions is in their active, and consistent refusal to put the interaction-specific pre-purchase information they have provided verbally, in writing, for the consumer to take away.
17. We also asked our researchers to make notes on the information and documentation evidence in their interactions. Among their observations, “I was told I could take a picture of the wall of a piece of paper that he has”; or “when we asked for something in writing she said that she did not have anything to give us and could not print from the computer so she wrote out some basics on a sticky note and gave that to us”; “he just handed me the brochure and then stared at me after each question” ; or “she did not show me anything in writing; she was looking at a computer screen while speaking to me which I was not able to see; I asked her to print off what she was reading and she obliged but the print out was illegible”; “she circled a lot of things in the brochure and pointed to prices and made notations but failed to explain anything sufficiently”.
18. This is a structural, systemic problem, that I suggest we all see, but which no one dares acknowledge. Without a corresponding ‘information object’ that both parties can refer to, all the marketplace control, influence, and informational power is with the SPs AND indirectly, with the Commission charged with regulating this marketplace. Individual consumers have no means of holding SPs accountable for the poor quality information and for the persistent gaps and information omissions. Only the most driven and energetic can devote hours to cancellation threats or social media flaming, while the vast majority of us sheepishly accept the status quo because at the end of the day, our lives and livelihoods require a functional mobile phone and data plan. What is the complaint mechanism for structural industry-wide practices that systemically disempower or misinform consumers?
19. In sum, then, our work reveals gross informational inequity between the service provider and the consumer; information is too often incomplete and inconsistent, alongside widespread patterns of SPs withholding or obfuscating information that would nevertheless be relevant and referenced in the fine print of a signed contract. We urge the Commission to consider incorporating information values into the current Code – values that respect responsibilities and rights of both the consumer and the SP. Investing in systemic improvements to information quality of the pre-purchase consumer-SP interactions will surely lead to a more balanced, marketplace with fewer formal complaints and fewer public inquiries such as this one.