Australians now view telcos as the most distrusted sector in the country
A 2017 WhatPhone survey suggested a correlation between fair treatment and trust when. The survey concluded that customers trust telcos that treat them fairly more than their counterparts. The same study concluded that more than 20 per cent of people don’t trust their telco at all.
That news was discouraging at the time – imagine more than 1 out of every five people harbouring doubt about their SIM plan provider. But with mounting complaints going unresolved, the distrust has grown consistently. And now, Roy Morgan’s latest Industry Trust & Distrust Rankings has placed the telecommunications industry as the most distrusted sector in Australia.
Telecommunications industry is the most distrusted sector in Australia’s economy. source
Considering how telcos have mishandled customer relations over the years, none of this should be a surprise. And with the Optus data breach still fresh in Australians’ minds, improving on any remaining trust might be daunting for all telco sector players.
Why do Australians rank telcos as the least trustworthy sector?
Roy Morgan’s Industry Trust & Distrust Rankings lists industries from the most trusted to the most distrusted. Trust is a significant determinant of consumer behaviour – a slight mishap could send a company from the top of the list to the bottom in weeks.
A relevant example is QANTAS, the national carrier marred with accusations of poor customer service. According to Roy Morgan, QANTAS fell from Australia’s 6th most trusted brand to the 40th in just six months.
Optus is even more relevant – the second-largest telco in Australia has moved from the 17th most distrusted brand in the country to the second most distrusted. This gigantic fall means Optus is now Australia’s second most distrusted brand, behind only Facebook / Meta. And this setback is a direct result of Optus’ recent data breach.
Unfortunately, the Optus data breach also had collateral effects. The decline in trust brought about by millions of customers’ data being publicly exposed by hackers also led to the recent distrust of the telco sector in general. As stated, the telecommunications industry already ranked very low on the trust scale, so adding the Optus debacle to the mix has only worsened things.
About the Optus data breach
Optus was hacked in September of last year. The data breach affected 10 million former and current Optus customers, whose personal information was posted on the Internet for all to see. Although the hackers eventually removed the post displaying the hacked data, the damage was already done. Customer details had been exposed, including names, dates of birth, email addresses, driver’s license numbers, medicare cards, and passport details.
To right the wrong, Optus set aside $140 million to aid the affected customers in retrieving new identification documents. However, considering 10 million customers were affected, this amounted to only $14 per customer. And while the breach occurred in September, Optus was accused of dragging its feet after the fact and not informing some customers promptly.
To make matters worse, critics believe Optus security to be so basic. The telco is believed to have left its API open, which contains customers’ data. While this isn’t rare, Optus also used predictable identifiers for each customer, making it even easier to decode the data. Six months later, Australians are still vulnerable to the significant data breach; some have sued Optus.
How Australians have reacted to the telco industry
Roy Morgan’s latest Industry Trust & Distrust Rankings is only one indicator of Australians’ increasing dissatisfaction with the telco industry, stemming from the Optus data breach. After all, the previous rankings placed the telco sector as the second most distributed industry in the country, so moving down to the most distrusted isn’t such a huge feat. On the contrary, the rankings prove that the distrusted telco industry has consistently lost trust over the years and finally tops the list.
But Australians have found another way to hold companies accountable for abusing customers’ trust. Law firm Slater and Gordon recently lodged a class action suit against Optus on behalf of 100,000 Australians who claim they are affected by the release of personal information from Optus’ data breach.
The recurring claim in the class action suit is that Optus has a duty to protect customers’ data and failed to do so. As a result, affected customers risk exposure and identity theft, and said customers are rightfully anxious and concerned.
We will have to wait to see how practical this civil suit approach will be. Could it be a wake-up call for the telco industry to start treating customers fairly? Perhaps, but only time will tell.
What is certain, however, is that class action suits might become the trending tool for bending big companies to the people’s will. For instance, after Medibank’s similar data breach last year, it is also a defendant in a class action suit brought by affected Australians. And similar to the telco industry, the insurance industry also dropped in distrust rankings following its data breach.
Final words
Our 2017 WhatPhone survey explained why people lacked trust in their phone company. Following that survey, Roy Morgan began publishing a trust and distrust ranking for all industries in Australia, and the telco sector has seen a consistent decline in trust. In addition, following Optus’ recent data breach, 100,000 Australians have joined a class action suit against the telco, displaying their lack of confidence in its ability to maintain customer trust.
These developments should be a North Star for telcos, but the sad truth is that they are likely to become just another news story lost in the annals of time and ignored by the senior management, which should pay attention.
There is a way things are done in the telco sector, derived chiefly from how they’ve always been done. Phone companies prefer to distract you with a shiny device, tie you into a contract for three years, promise the world up front, and then forget about those promises when your agreement is signed. There are promos, sports stats, and brand advertisements costing millions. And among all that paraphernalia, there is a simple truth they refuse to acknowledge or address: People don’t trust their phone companies. It’s a problem that is getting worse, not better.
Trust is such a fundamental element of any relationship. Without it, phone companies will churn customers through a lifetime of unsatisfying transactions.