It does not mean that the passwords are in plaintext. It is possible that they could process your password, when you originally set it, to convert it into the numberpad equivalent and store that, either in plaintext or hashed.
There are a few different ways that this process could be concerning, and worth a question or two about how they process passwords.
My greater concern is how they handle the password you type into your phone. That is most likely stored in their help desk system without any protections. Whatever they do to compare it to your stored password, there must also be a process to protect the password you type in.
My guess is that they calculate the numperpad equivalent of your password and store that number in plaintext in your account notes. It is then compared against what you type in when prompted on the phone.