Watchdog: Telcos have two months to sort marketing

• Published date: 09 November 2021

Craig Young, head of consumer-advocate the Technology Users Association of NZ (Tuanz), said: “The decision by the commission comes after a lengthy consultation with individual consumers and industry bodies, including Tuanz, which highlighted the use of deliberate confusion to onboard new, uninformed, and unsuspecting customers.”

Young said it was a “step in the right direction” to correct what his group calls a “confusopoly”.

“We have been deeply concerned about the tactics being used by retail service providers. Copper migration is being used as an excuse to move unsuspecting consumers to preferred services without their express consent, or the information they need to make an informed decision about the alternatives,” Young said.

“Telcos are notorious for using confusion to avoid competing on price, and the practice has a long history in New Zealand.

“The current product disclosure regime has serious weaknesses, so it is pleasing to see the commission outlining new requirements around understanding, and clarity of the service performance of alternatives to their current service.”

But telcos are playing down the demand, saying they are already close to being on the same page as the regulator. They say they had already taken steps to ensure their messaging is clear.

The Commerce Commission said it has instructed the industry to develop a marketing code that “ensures consumers receive all the information they need from telco providers to make informed choices about the technology options and plans that best suit their needs”.

Telecommunications Commissioner Tristan Gilbertson said the issue has become urgent as a result of increased marketing activity linked to Chorus withdrawing the old copper network and Spark removing public switched telephone network (PSTN) connections.

“Consumers have told us that marketing of alternatives to legacy copper-based services is often incomplete, confusing or misleading.

“Providers have also contacted us with concerns about their competitors’ behaviour,” Gilbertson said — in an indirect reference to a Chorus...