Order in Council concerning high-pressure telecommunications sales practices

Backgrounder

The Governor in Council has directed the Canadian Radio-television and Telecommunications Commission (CRTC), pursuant to section 14 of the Telecommunications Act, to make a report regarding the retail sales practices of Canada's large telecommunications carriers. The CRTC is directed to examine claims of aggressive or misleading sales practices concerning telecommunications services, the prevalence and impact on consumers, as well as potential solutions.

The official text is available via the Privy Council Office. Below is the unofficial text of the Order in Council for reference:

Whereas Canada's large telecommunications carriers offer their telecommunications services for sale through various persons, including their employees and third parties;

Whereas Canadians have expressed substantial concern regarding the practices used by those persons when offering the telecommunications services of those carriers for sale;

Whereas there have been reports that those persons sometimes use misleading or aggressive sales practices when they offer those telecommunications services for sale;

Whereas there have been reports that the misleading sales practices include failing to provide the information that is necessary for consumers to make informed decisions to enter into contracts for telecommunications services, including by providing incomplete, vague or misleading information;

Whereas there have been reports that the aggressive sales practices include offering for sale to consumers telecommunication services that are unsuitable for them;

Whereas those misleading or aggressive sales practices may include the abuse of information asymmetries by Canada’s large telecommunications carriers in order to benefit those carriers;

Whereas there have been reports that those misleading or aggressive sales practices harm or risk harming consumers, including with respect to finances or by causing stress, confusion and frustration;

Whereas there have been reports that vulnerable Canadians, such as those who are vulnerable due to their age, a disability or a language barrier, are more likely to be impacted by those practices;

Whereas there have been reports that, because of those misleading or aggressive sales practices, the price paid by Canadians for telecommunications services is sometimes unfair, unpredictable or higher than they expected;

Whereas the government has monitored the number and type of complaints filed by Canadians with the Commission for Complaints for Telecom-television Services for landline telephone, mobile wireless, Internet access and television services;

Whereas the government considers that Canadians deserve a competitive marketplace where consumers are treated fairly;

Whereas section 7 of the Telecommunications Act (“the Act”) declares the following objectives, among others, as the Canadian telecommunications policy objectives:

  • (a) to facilitate the orderly development throughout Canada of a telecommunications system that serves to safeguard, enrich and strengthen the social and economic fabric of Canada and its regions;
  • (b) to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada; and
  • (c) to respond to the economic and social requirements of users of telecommunications services;

Whereas section 47 of the Act provides, in part, that the Canadian Radio-television and Telecommunications Commission ("the Commission") shall exercise its powers and perform its duties under the Act with a view to implementing the Canadian telecommunications policy objectives;

Whereas subsection 27(2) of the Act provides that no Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage;

Whereas section 24 of the Act provides that the offering and provision of any telecommunications service by a Canadian carrier are subject to any conditions imposed by the Commission or included in a tariff approved by the Commission;

Whereas the Commission has in certain cases rendered codes of conduct, including the Deposit and Disconnection Code and the Wireless Code, to encourage fair treatment of consumers and to empower consumers to make informed decisions with respect to their communications services;

Whereas telecommunications services are commonly offered with other services in packages referred to in the marketplace as "bundles";

Whereas section 14 of the Act provides that the Governor in Council may require the Commission to make a report on any matter within the jurisdiction of the Commission under the Act;

And whereas the Governor in Council considers the views of Canadians, the employees of Canada’s large telecommunications carriers and the third parties who offer the telecommunications services of those carriers for sale as well as the sales guidelines set by those carriers to be among the important sources of information to be considered in evaluating the retail sales practices of those carriers;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to section 14 of the Telecommunications Act, requires the Commission to make a report, by no later than February 28, 2019, regarding the retail sales practices of Canada's large telecommunications carriers and the harm to consumers or the possibility of such harm caused by those practices and considers that it is material to the inquiry that the Commission consider the following:

  • (a) whether the large telecommunications carriers offer their telecommunications services for sale by engaging, either through their employees or third parties, in misleading or aggressive sales practices, such as providing consumers with incomplete, unclear or misleading information regarding service terms and conditions or selling them telecommunications services that are unsuitable for them, and, if so, the prevalence of those practices;
  • (b) the measures or controls that those carriers have in place to monitor, identify and mitigate the risks that consumers are subject to misleading or aggressive sales practices;
  • (c) the consumer protections respecting retail sales practices and contracts for telecommunications services that are currently in place to empower consumers to make informed decisions with respect to their telecommunications services and promote the fair treatment of consumers in their relationships with telecommunications carriers;
  • (d) the most feasible and effective ways to strengthen or expand the scope of existing consumer protections such as those contained in the Commission’s codes of conduct, or to create new consumer protections, including codes of conduct relating to new subjects, in order to further empower consumers to make informed decisions with respect to their telecommunications services and to further promote the fair treatment of consumers in their relationships with telecommunications carriers.

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