Ofcom is working on a compulsory industry code of practice
Telecoms regulator Ofcom is to spend up to six months investigating Phones4U over alleged mis-selling of mobile phone deals.
The retailer is the first in the UK to face an inquiry by Ofcom despite the issue being a common consumer gripe.
The regulator said it had received a large number of complaints about alleged mis-selling and other issues by the independent retailer.
Phones4U said it would co-operate fully with Ofcom and act if required.
"Ofcom's investigation will consider whether Phones4U has engaged in conduct which infringes any relevant law and harms the collective interests of consumers," the regulator said in a statement.
It is thought the probe could involve looking into cash-back deals, prompted by complaints from customers to Ofcom and the advice centre Consumer Direct.
A spokeswoman for Phones4U said it intended to co-operate fully with Ofcom and was already talking to them.
"Phones4U prides itself in maintaining the highest standards of customer service. If any instances where this has not been the case are brought to light, as a result of this inquiry, we will act accordingly," she said.
In March, Ofcom said it would crack down on the mis-selling of mobile phones after the failure of a voluntary code of practice across the industry.
It said the number of complaints generally had risen from 460 a month to 700 since the voluntary code came in last summer.
It is drawing up a compulsory code of practice aimed at tackling cash-back offers which fail to pay out and cases of false information offered when buying a contract.
Firms that do not comply with the rules could be fined up to 10% of their turnover.
Ofcom is consulting on the plans which it wants in place by the summer.
Consumer group Which? has previously called for mobile phone cash-back offers to be banned, unless the cash-back comes automatically.