Ofcom warns on phone 'slamming'

Ofcom said it is receiving about 600 complaints a month

Concerns are increasing that the high pressure sales techniques that once blighted the energy industry are spreading to the telecoms business.

Communications regulator Ofcom has spoken of its concern over a sharp increase in "slamming", which is when a consumer is switched provider without their knowledge.

The regulator is hopeful that a new mandatory code of conduct, which begins at the end of March, will offer consumers greater protection from dubious sales practices.

And it has warned telecoms companies they could be fined up to 10% of their global turnover if they breach the regulations.

Cold call

Slamming occurs when a consumer receives a "cold call" from a provider offering a cheaper service, and then is moved without their knowledge.

When the market becomes this big unfortunately there are always a few bad apples John Miller, uSwitch

Ofcom is receiving up to 600 complaints about slamming each month, compared to around 300 a year ago.

USwitch, an online service to find a cheaper telecoms supplier, is also concerned by the problem which it said is the result of an increasingly competitive market. Its spokesman John Miller said:

"When the market becomes this big unfortunately there are always a few bad apples. That could be over-zealous salesmen or companies that are being blatantly misleading."

However, Matt Peacock of Ofcom told Money Box that when the current voluntary code of conduct becomes mandatory that "these kinds of things should not happen" and that it would be a breach of a company's licence if it did.

Verbal consent

But there are concerns the new regulations will not go far enough, as a provider will still be able to switch a consumer without written consent.

All it will need is a verbal agreement plus a customer's telephone number and postcode.

But Matt Peacock of Ofcom said it wanted to avoid consumers having to "fill out reams of paperwork and go through some sort of regulatory maze" when they did want to switch providers.

If you breach a condition, we have a whole range of enforcement powers Matt Peacock, Ofcom

He was also keen to remind consumers they had 10 working days from the date they receive a letter saying they have been switched to "take up the transfer with the companies involved".

During that period consumers do not face a financial penalty.

And he urged people to contact Ofcom should they have any complaints:

"We need to know if companies are engaged in what amounts to unscrupulous transfers, because we collect that data and we take it up with the companies concerned," he said.

And he spoke of tough action if companies fell foul of the new regulations:

"What we are going to do is make compliance with this new code of practice a condition under which all telecoms companies must operate.

"Now if you breach a condition, we have a whole range of enforcement powers.

"At the far and of the spectrum if a company is truly breaching its conditions we can fine them up to 10% of their global turnover."

BBC Radio 4's Money Box was broadcast on Saturday, 12 February 2005, at 1204 GMT.

The programme was repeated on Sunday, 13 February, 2005, at 2102 GMT.