Page last updated at 12:06 GMT, Tuesday, 17 March 2009

Ofcom tackles phone mis-selling

A man using his mobile phone
Mobile mis-selling complaints have been dropping recently

New plans to tackle mis-selling of fixed-line and mobile phone contracts have been published by the communications regulator Ofcom.

More than 1,000 complaints a month are made to the regulator by consumers whose telephone service provider has been switched without their permission.

Ofcom is planning simpler rules with could lead to firms being fined up to 10% of turnover if they mis-sell.

Mandatory new rules will also come in to clean up the mobile industry.

Complaints about cashback offers, when customers buy a handset up front and then are refunded the cash over the course of the contract, peaked at about 700 a month in late 2007.

Restrictive terms and conditions, which were often difficult to understand, meant some of these customers had failed to receive their cashback. Other retailers have gone bust, leaving customers without their money.


Changing a fixed-line provider without the customer's permission - a practice known as slamming - has been a problem for some time.

Over the past year it has been the biggest consumer gripe in the fixed-line market, and many more who have been affected are thought not to have complained to the regulator.

Ofcom is proposing providers should keep better records about sales calls, including recording conversations, and give clearer consumer advice.

In the mobile market, the regulator has been demanding companies clean up their act over cashback deals and inaccurate information when customers sign up for a contract.

A voluntary code of conduct failed to reduce complaints. After the regulator vowed to bring in mandatory rules, backed with fines, they dipped significantly - down from 400 to 28 complaints a month over 2008.

Ofcom has decided to follow through with the plan for mandatory rules making sure consumers get all the correct information when signing up for a contract. They will come into force in September.

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

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