Ofcom clamps down on mobile phone mis-selling

Ofcom has unveiled proposed tougher rules aimed at stopping misleading sales and marketing practices by mobile phone companies and third party sales agents.
www.ofcom.org.uk

If adopted today's proposals will see the introduction of a “General Condition", which all communications providers must adhere to under the Communications Act 2003. Companies breaching the General Condition could be fined up to 10 per cent of relevant turnover.

In a statement the watchdog said mobile operators should take efforts “not to engage in dishonest, misleading or deceptive conduct and to ensure that those selling their products and services similarly do not mis-sell."

They should also “make sure the customer intends and is authorised to enter into a contract" and “make sure consumers get the information they need at the point of sale."

Operators should also “ensure that the terms and conditions of cash back deals offered by their retailers are fair" and “carry out due diligence and a number of checks in respect of their retailers."

A consultation period will run until 29 April 2008 with the likelihood of new rules in place by the summer, according to Ofcom. The consultation document can be found here.

“The UK has one of the more competitive mobile phone sectors in the world. But strong competition is no excuse for marketing malpractice," said Ofcom chief executive, Ed Richards.

“We warned the industry last year that unless it cleaned up its act we would consider introducing new rules. The facts show that this has not happened, so we are now proposing tougher measures to protect consumers from unacceptable sales and marketing practices."

Last summer the watchdog threatened the mobile sector with the introduction of mandatory rules, if the sector failed to stamp out practices deemed to be against the consumer interest.

Though five mobile phone operators signed up to a voluntary industry code in July 2007, Ofcom said it had continued to receive a large number of consumer complaints about mobile mis-selling and cash back issues.