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Ofcom tackles mobile mis-selling

ofcom office of communication 1
ofcom office of communication 1

Ofcom logo redNot content with trying to stamp out the practice of slamming, Ofcom has also confirmed the introduction of new rules to stop misleading sales practices in the mobile phone market.

To give this a bit of history, mobile network operators introduced a voluntary Code of Practice in July 2007 to tackle mis-selling and cashback issues, following a significant increase in the number of complaints in those areas.

This voluntary Code did not lead to a significant reduction in complaints, so in March 2008 Ofcom proposed new mandatory rules – called a General Condition.

Since then, Ofcom has seen a reduction of complaints about mobile cashback. In early 2008 Ofcom received approximately 400 complaints per month and in December 2008 Ofcom received 28 complaints.

However, Ofcom said that complaints about general mobile mis-selling over the last six months are at similar levels to those when the Code was introduced – averaging at around 200 a month – although they have fallen from a peak of over 300 a month in mid-2008.

Ofcom’s new rules to tackle mis-selling state that providers must:
* Not engage in dishonest, misleading or deceptive conduct and put provisions in place to ensure that those selling their products and services similarly do not mis-sell
* Make sure the customer intends and is authorised to enter into a contract
* Make sure consumers get the information they need at the point of sale
* Make sure that the terms and conditions of cash back deals offered by their retailers are not unduly restrictive
* Carry out certain due diligence checks in respect of their retailers.

The new rules will come into force in September 2009, after which Ofcom will start an enforcement programme to monitor communications providers.

If providers breach the rules they could be fined up to 10 per cent of relevant turnover.

“Ofcom wants to stamp out mis-selling in the telecoms market so that consumers can get the best that competition brings,” said the regulator’s chief executive Ed Richards.