Mobile providers move to stamp out rogue practices

Mobile phone providers are attempting to stamp out misleading sales and marketing practices with a new industry code of practice, backed by the industry watchdog Ofcom.

There are currently more than 66 million active customer accounts across the UK's five mobile network operators (MNOs), with services provided by the operators themselves as well as a host of mobile virtual network operators.

This level of market maturity brings healthy competition, which in turn brings benefits for consumers, such as lower prices and a greater range of services. However, it is important that those selling mobile services do not overstep the mark and seek to confuse or mislead consumers.

"Competition in the mobile market has led to lower prices and a wide variety of valuable and exciting new services," said Ed Richards, Ofcom chief executive.

"However, consumers must trust those that sell to them. We expect this new voluntary code of practice to stamp out mis-selling in mobile; if it does not, we will not hesitate to step in to protect consumers."

Ofcom says it is concerned about the significant increase in complaints since the beginning of the year relating to mis-selling of mobile phone services, involving mobile phone retailers either acting, or claiming to act, on behalf of MNOs.

It currently receives in the region of 400 complaints per month, a huge jump when compared to the number of complaints received at the end of 2006.

The new code of practice, published by Ofcom, sets out:

• Minimum business standards, including prohibited sales and marketing practices
• How retailers must comply, including details of proactive monitoring by MNOs and possible sanctions
• Due-diligence exercises to determine which retailers should be engaged
• How complaints to MNOs should be monitored and handled.

The scheme is currently voluntary, but Ofcom has warned that if it does not see a significant reduction in the number of complaints in the coming weeks as a result of this initiative it will begin to consider more formal regulatory options to protect consumers.