Complaint concerning alleged misleading statements by Wharf T&T Limited staff regarding its residential telephone line service
Complaint against: Issue: Relevant Instruments: Case Opened: Case Closed: Decision: Outcome: Case Reference: The Complaint 1. The Telecommunications Authority ("TA") received an industry complaint about alleged misleading or deceptive statements made by a representative of Wharf T&T during a telephone conversation with a prospective customer on 2 June 2004. The complainant alleged that during the subject telephone conversation, the Wharf T&T staff member informed the prospective customer that all its residential telephone customers must enter into a two-year fixed term contract. The staff member stated that this was a requirement of 電話管理局」 English translation: 「 (in “the Telephone Authority”). She further emphasised that the TA required all five telecommunications operators in Hong Kong to enter into fixed-term contracts with customers before providing their residential telephone line service. The claimed reason was the avoidance of confusion caused by customers switching frequently between service providers. The staff member also told the complainant that the telephone conversation would be taped and passed to the TA as evidence. According to the complainant, the above statements are contrary to its understanding that the TA has never required any telecommunications operator to impose a fixed-term contract on any customer. It also questioned whether any recording of the subject conversation would actually be provided to the TA as foreshadowed. Wharf T&T Limited (“Wharf T&T”) The complainant alleged that a representative of Wharf T&T made misleading or deceptive statements in the promotion of its residential telephone line services Section 7M of the Telecommunications Ordinance (Cap. 106) (the "Ordinance") July 2004 October 2004 No breach of section 7M of the Ordinance Case Closed T149/04
2.
3.
TA's Investigation 4. The complainant submitted a tape recording of the subject telephone conversation (the “taped conversation”) to the Office of the Telecommunications Authority (“OFTA”). OFTA staff analysed this conversation and confirmed that the above-noted statements were made by the subject Wharf T&T staff member. Having listened to the taped conversation and having no record of receiving a
1
5.
similar recording from Wharf T&T as claimed would occur in the recording, the TA was concerned whether the alleged statements made by the staff of Wharf T&T constituted a breach of section 7M of the Ordinance, which requires: “A licensee shall not engage in conduct which, in the opinion of the Authority, is misleading or deceptive in providing or acquiring telecommunications networks, systems, installations, customer equipment or services including (but not limited to) promoting, marketing or advertising the network, system, installation, customer equipment or service.” The TA therefore provided a copy of the taped conversation to Wharf T&T and requested Wharf T&T to make representations and provide relevant information in relation to the complaint. Wharf T&T's Response 6. Wharf T&T confirmed that the taped conversation was a telephone conversation between its staff, Ms. Y (name withheld), and the prospective customer on 2 June 2004. The conversation arose because the customer called Wharf T&T’s hotline inquiring about its residential telephone line service. Wharf T&T acknowledged the serious nature of this complaint and upon receipt of the TA’s original letter, it took immediate action and warned Ms. Y of her mistake. It also required Ms. Y to provide a written statement of the event and sought another statement from her supervisor. According to her statement, Ms. Y made the subject statements unintentionally and was not instructed by the company to make such statements. She claimed that she did not intend to mislead or deceive the customers. She felt regret for having said the things she did and undertook not to commit the same mistake in the future. Wharf T&T also reviewed all customer calls with a duration of over 1 minute conducted by Ms. Y and confirmed that no similar statements were made to any other consumers. On this basis, Wharf T&T submitted that the subject complaint was a one-off event.
7.
8.
9.
10. Wharf T&T further submitted that the alleged statements made by Ms. Y during the taped conversation were not authorised or encouraged by the company and in fact, such statements were a departure from company regulatory policy. 11. In support of this last submission, Wharf T&T provided detailed training information to OFTA staff. It explained that its training programmes are provided to its telesales staff in two phases. 12. The first phase of training involves a 5-week training programme for newly appointed staff and covers the basic sales technique and product knowledge. Evaluation and testing is conducted throughout the training programme. Trainees are closely monitored by their supervisors when they make their first calls to prospective customers during their third week of training. Advanced training, involving role-playing and testing, is conducted at the end of this first phase. The
2
second phase of training takes the form of a refresher course in which telesales staff discuss and analyse selected voice clips. 13. Wharf T&T also provided to OFTA staff its Code of Conduct, which includes prohibitions against misleading or deceptive conduct. Wharf T&T stipulates that the Code must be observed by all its telesales staff. In terms of accountability, sales managers and supervisors are responsible for monitoring strict compliance with the Code. Regular weekly meetings are held between Wharf T&T’s sales managers and the telesales supervisors to discuss sales activities issues and adherence to the Code. 14. Wharf T&T explained that it took this complaint very seriously and has implemented further precautionary measures and strengthened existing safeguards to ensure that its telesales staff provide correct information to consumers, including: (a) a special briefing of all telesales staff after receipt of the subject complaint during which they were reminded of their responsibilities and warned of the serious nature of this complaint; (b) all conversations between its telesales staff and customers will now be recorded and its staff will be made aware of this practice; (c) all team supervisors will randomly select and listen to the recordings of at least 2 calls each day made by each of their team members in order to ensure compliance and quality; (d) sales consultants will from time to time undertake real-time call monitoring to ensure that correct information is being given to customers by its telesales staff; (e) all team supervisors are directly responsible for monitoring the performance of their team members on site; (f) team supervisors are now required to perform random cross-team mock calls on other teams at least 3 times a week in order to scrutinise the performance of other telesales staff and in particular to ensure the accuracy of the information provided; (g) all telesales staff are now required to attend extended role-play sessions to learn from the possible mistakes encountered in daily sales activities; and (h) all training materials will be regularly reviewed and updated. Wharf T&T is also planning to review its general staff disciplinary policy to foster a more formalised procedure whereby any salesperson accused of providing misleading or deceptive information will be subject to immediate suspension from work until investigations into the salesperson’s conduct have been completed. 15. Wharf T&T further confirmed that it will continue to follow very closely the
3
public reports and complaint cases published by OFTA, and will use such cases as core material in its staff training programs. TA's Findings 16. After considering both the information provided by the complainant and Wharf T&T’s response, the TA considers that there may be a prima facie breach of section 7M of the Ordinance in this matter. However, it is also noted that in previous cases involving one-off mistakes by sales staff the TA has concluded that no breach of section 7M was established. Cases T193/03 and T213/03, which involved incorrect oral representations by staff of CSL and PCCW-HKT Limited, respectively, are two recent examples. 17. It is uncontested that the subject telesales staff stated incorrectly that OFTA requires all residential telephone services to be provided under fixed-term contracts. It is also a matter of fact that no recording of the subject conversation was provided to OFTA by Wharf T&T as indicated would be the case. The recorded statements of the Wharf T&T telesales staff member are therefore, on their face, misleading or deceptive. 18. It is also the case, however, that the subject conversation would appear to be a one-off event. The TA is satisfied that Wharf T&T diligently reviewed other conversations involving this particular staff member where she had the opportunity to make similar, incorrect statements. None of those other conversations included any incorrect statements. Accordingly, the TA is satisfied that the recorded conversation is a one-off mistake by this particular staff member. 19. No evidence was obtained by OFTA staff, either from the complainant or from Wharf T&T, to suggest that the statements of concern in this case may have been repeated by other telesales staff employed by Wharf T&T. In fact, the submissions received indicate a general strict compliance with company policy in this area. 20. In these circumstances and with reference to previous analogous cases, the TA does not consider a breach of section 7M to be established in this matter. 21. In terms of corrective action by Wharf T&T, the TA acknowledges the company’s pro-activity in taking immediate action to follow-up this complaint and, by its own initiative, to implement a comprehensive, yet targeted, package of improvements to its legal compliance program. While not of itself relevant to whether or not a breach of the law took place in this matter, the TA does not believe that any more extensive remedial measures would have been required even if a breach of the law could have been established in this case. 22. In these respects, Wharf T&T has applied to itself a standard which is arguably higher than that required by the law. While it is the TA’s stated position to view the misleading or deceptive practices of the industry seriously and the imposition of significant sanctions in appropriate cases is necessary, the TA is very supportive of the actions taken by Wharf T&T in this matter and encourages other operators to follow the lead of Wharf T&T in this respect. The consequence of doing so will be fewer complaints and higher standards of customer satisfaction beyond what the
4
imposition of fines and legal censure could in themselves achieve. Conclusion 23. Based on the above findings, the TA does not conclude that Wharf T&T has breached section 7M of the Ordinance in this instance. TA's Action 24. The TA has concluded the investigation of this case and has not found a breach of section 7M of the Ordinance. This case is therefore closed.
5