Home Business Telecommunications Telecommunications ‘most complained about' NZ industry: report
Telecommunications ‘most complained about' NZ industry: report Image courtesy of Stuart Miles at FreeDigitalPhotos.net Featured

Retail telecommunications is still the most complained about industry in New Zealand despite complaints levels remaining relatively flat year-on-year, according to a new consumer issues report from the competition enforcement agency, the Commerce Commission.

And, also high on the list of complains for consumers was the online area, with the Commission finding that online sales generated nearly a quarter of all Fair Trading Act complaints, highlighting what it says is the growing size of this market and the challenges for consumers purchasing goods from overseas-based companies in particular.

“Both the telco and online retail sectors are priority focus areas for us,” said Commissioner Anna Rawlings in the report, which looked at the 7452 consumer complaints it received during the 2017/2018 financial year.

The Commission report reveals that there were 584 complaints about telecommunications retail service providers in the 12 months to the end of June under the Fair Trading Act, just ahead of the next most complained about sector — motor vehicle retail — which had 420 complaints over the 12-months.

According to the report, the 584 complaints about telecommunications retail service providers represents a decrease from the 603 complaints received about TRSPs in the year ended 30 June 2017.

nz complaints

The Commission says the telecoms industry accounted for 9% of all FT Act complaints in the 2017/18 year, the same as in 2016/17 - and TRSPs continue to generate a higher volume of complaints under the FT Act than other industries, “a trend observed since the end of the 2014 calendar year”.

“Consistent with this, a recent survey of 28 countries found that in 2017 TRSPs were among the top three most complained about industries,” the Commission observes.

“Consumers in overseas countries complained about issues like accurate billing, closely resembling the complaints reported by New Zealand consumers.

“There are many providers of telecommunication products and services, all competing for consumers’ business with a range of offers and contracts of varying lengths. Consumers report that it can be a challenge to understand and compare the range and complexity of these offers in terms of price, quality (for instance, broadband speed) and what is included in, or excluded from, a contract.”

In addition, the Commission says a key feature in the telecommunications industry is that many providers create ‘bundles’ of products and services, which consumers say can be difficult to compare.

“These bundles may combine broadband with a home phone and/or mobile; telecommunications products with non-telecommunications products such as electricity; or broadband with power or with music or video streaming subscription services,” the Commission notes.

In its report the Commission says that purchasing online is both beneficial and risky for consumers, as consumers’ online spending continues to grow in double-digit percentages year by year.

The report reveals that in the 2017 calendar year New Zealanders spent approximately NZ$4 billion shopping in both domestic and international online stores – and technological change has transformed the way consumers learn about, consider and decide to buy goods and services.

“Shopping from mobile devices, buying goods from traders based overseas, and considering the online reviews posted by other consumers before making a purchase decision have all become normal parts of the consumer experience,” the Commission notes.

“When shopping online works well, consumers can benefit from increased choice, competitive prices, secure and efficient payment systems and prompt delivery services.

“Consumers should be able to trust the information that is presented to them online. This includes the representations online traders make about the products or services on offer, and the reviews of fellow online shoppers.”

The Commission says that 24% of the Fair Trading Act complaints the Commerce Commission received in the year to 30 June 2018 were about purchases considered or made online.

According to the Commission, complaints show that some consumers have trusted the legitimacy of an online trader and then felt let down.

“This includes consumers complaining that they have not received products at all, along with other issues such as allegations of counterfeit and poor quality goods, delivery delays and purchases costing the consumer more than expected.

“These are similar to the types of complaints the Commerce Commission received in 2016/17.”

The Commission says that a common theme in online complaints it received involves consumers being unable to make contact with overseas-based traders to resolve concerns about product delivery or quality.

“We also hear from consumers who thought they were buying from a New Zealand based trader and were surprised to discover that it was based overseas,” the Commission observed.

The Commission says that consumers are faced with increasingly sophisticated marketing techniques, and now have the ability to purchase 24 hours a day, 365 days a year, with purchases made on smartphones and tablets increasing year on year.

“Through targeted advertising and price discrimination online, traders are more able to appeal to the wants and needs of the individual than ever before,’ the Commission says.

“Some traders, especially those selling online, have developed marketing techniques that some consumers tell us have caused them to make hurried, spontaneous purchases.

“For example, an accommodation site may state that only one discounted room remains available, introduce a price-hold for only a few minutes or represent constant purchases by other consumers.

“Consumers report feeling pressured by these tools into making a quick purchase before they have completed the due diligence they might otherwise have carried out.”

The Commission says that consumers describe finding it difficult to verify the accuracy of these representations, and these techniques are also used on some travel sites and ticket reselling sites.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

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