| Journal: TWUK | Section: |
| Title: | Issue Date: 04/09/00 |
| Author: | Page Number: 10 |
| Copyright: Other |
DTI report lacks detail on Teletext ownership
An open letter to consumer affairs minister Kim Howells:Iam writing to express my grave concern that the draft Department of Trade and Industry report, supposedly coming into force on October 9, fails to deal with the lack of transparency of ownership that occurs within the medium of Teletext.
Teletext now accounts for the sale of over two million holidays per year. It is within this market that customers are most exposed to switch-selling tactics, since they have not made a selection from a brochure, and are merely enquiring about price and availability. In reality, customers do not know whether the telesales operator at the other end of the phone has searched all available operators, or is indeed giving them the best available price, thus allowing the vertically integrated companies to directionally sell to their in-house operators.
Staff in these companies’ call centres often have half of their salaries based on commissions, with these payments being heavily biased towards their in-house tour operators’ products. The net result of this is that 80%-90% of sales are directed internally. Yet in the vast majority of cases, the vertically-integrated groups do not trade under their tour operating brand names but under a wide variety of brands that only exist on Teletext.
The reason for this duplicity is very simple. They wish to mislead the customer into thinking they are receiving independent advice about the best available holiday, when all the time they are only promoting their own holidays.
In my opinion, the only way to resolve this is to stipulate that if 50% or more of the holidays sold by acall-centre-based operation are for a tour operator linked to the owners of that call centre, then they must trade under the tour operators name. It is insufficient to stipulate that they must show the name of the tour operators name on their Teletext pages, because they often deliberately advertise lower priced product from other operators, in order to generate calls that they can then switch-sell into their own in-house product.
The most blatant abuse of the lack of disclosure over ownership links is clearly within the Teletext arena and not the high-street travel agencies, yet this is an area that has not been covered at all in your draft order. I urge you to allow independent call centres like my own, Holidays by Phone, to present in detail about the abuses to consumers that are occurring in our marketplace today so that you can extend the draft order to give consumers the comprehensive protection they deserve.
Steve Endacott
Managing director
Holidays by Phone
Manchester