Consumer protection in the digital era

In an age of political polarisation and culture wars, few things unify society like our collective hatred of useless chatbots, automated call centres and endless hours on the phone that lead nowhere. 

In this respect, Spain's plan of forcing firms to make an actual human available to customers in a timely manner must be a vote winner, even if the proposals don't survive entirely intact. 

But don't expect similar moves from the Canadian government, say observers. While policymakers here recently went to bat for airline passengers, government apathy towards customer care remains even after years of exceptionally frustrating customer service during the pandemic. 

Overall, consumer protection rules in Canada "are weak and not rigorously enforced," said Gail Henderson, professor at Queen's Faculty of Law. "A bill like [Spain's] might help a bit, but consumers also need governments to do better in providing access to reliable, low-cost internet and mobile data, and help improving digital literacy." 

Indeed, Canadians pay some of the highest mobile fees in the world. This is partly because policymakers on both sides of the aisle have taken a market-friendly approach to regulations since the 1980s. One of the government's main policy pillars is not chilling the environment for innovation and growth, particularly in technology. Meanwhile, consumer protection has been falling off the government's radar for decades. Prime Minister Justin Trudeau has yet to make good on a pledge to create a new Canadian Consumer Advocate. "It remains a broken promise," said Daniel Tsai, an adjunct professor at the University of Toronto who teaches law, business, and technology.

But if Spain successfully advances its proposal, it could move the needle elsewhere, especially if it motivates similar action in the rest of the European Union, says Tsai. "Canadian consumers and parliamentarians will have the impetus to fight for similar consumer wins in Canada."

Currently, no existing federal rules in Canada require businesses to provide services from a live person, according to ISED. 

As with most things in Canada, consumers are protected by a mix of federal and provincial legislation, so it would be difficult to determine who has regulatory authority over various economic sectors. The Canadian Consumer Protection Act covers the right to safety, information, and consumer education, as well as the right to seek redress. Provincial and territorial laws focus on the terms on which businesses transact with consumers. 

Spain's plans are indeed ambitious — some say extreme. In May this year, the government unveiled its Customer Service Bill, which still needs the approval of Spain's Parliament before it can become law. Among other changes, it requires firms with more than 250 workers to provide a real live human being during business hours, limit the wait time to three minutes and resolve issues within 15 days. "The practically infinite waiting times that produce frustration are over," Consumer Rights Minister Alberto Garzón told journalists.

Firms would face fines of up to € 100,000 for persistent rule-breaking or if the problem affects vulnerable consumers. Providers of basic services, such as utilities, phone, and internet, will have to offer round-the-clock customer service. 

How far the Spanish reforms will go is unclear, especially given the logistical challenges and likely strenuous opposition from the business community. 

"Setting a three-minute maximum wait time may require substantial investment in call centers, the costs of which would likely be passed on to customers," said Camden Hutchison, an assistant law professor at the University of British Columbia. "For large businesses with many customers, I imagine this requirement will be very expensive."

There are also questions about what the proposed bill would achieve in terms of improved service. "If customer satisfaction is a priority for a firm, would it not make good business sense to have that addressed? Does it really require legislation for a business to figure out how to improve services to clients," asked Joan Westland Eby, the former mayor of Bolton Est, Quebec, and consultant on inclusive policy and programs. 

Whether it makes sense or not, survey after survey points to customers preferring to speak to humans. But the promise of lower bills is a great motivator to go down the robot route, regardless of what customers want. Industry analyst Gartner estimates that the call centre industry could trim $80 billion in costs by replacing humans with AI chatbots. 

Slimming down customer help departments benefit companies in two ways: firms enjoy cheaper labour bills and fed-up clients end up swallowing losses. "Without some sort of regulation, there is no incentive for companies to take wait times seriously," said Jonathan Schachter, a consumer protection lawyer at Waddell Phillips in Toronto.

There are also equity issues at stake. As firms increasingly delegate former back office functions to their clients, many get lost, particularly when problems arise.

"There is a general concern that as companies try to move away from things like paper bills and traditional call centres and put everything online, that certain consumers may get left behind," said Henderson at Queens University, who says she has given up waiting on occasion. "But I can afford to incur an extra fee I wasn't expecting – many Canadians can't."

This is why consumer advocates say we should try to match Spain's commitment to improving customer service in Canada. Measures like requiring big firms to publish support numbers are a good start. "Concealing them can exclude vulnerable populations," said Schachter.

 "With the right balance, [firms] can provide adequate telephone support to the customers that need it without the enormous investment that a three-minute maximum would require."