3/17/2009 11:01:00 AM
Mis-selling still on agenda as Ofcom confirms new rules
Mobile retailers have been issued with new rules on mis-selling and cashback by Ofcom, after first setting out its ‘general condition’ on the issue in September 2008.
Ofcom said although complaints on cashback have drastically fallen, there is still a high level of complaints on mis-selling – an average of 200 per month. In the middle of last year, complaints were at 300 per month.
The rules kick in from September 2009 and underline a process where Ofcom, together with Trading Standards, will respond to high levels of complaints on any retailer with a thorough investigation and a maximum fine of 10% of the retailer’s ‘relevant revenue’.
Ofcom claimed cashback complaints from consumers have fallen from 400 per month in early 2008 to 28 in last December, attributing the decline to the application of the code of practice introduced by the industry and the regulator’s general condition.
Rules now cover ‘dishonest, misleading or deceptive conduct’, clarity from salespeople over the tenure of contracts, ensuring consumers are told about coverage and all charges involved in contracts, ensuring terms and conditions on cashback are not ‘unduly restrictive’ and putting the responsibility on operators to take due diligence on retailers and dealers.
Ofcom highlighted high levels of complaints at Phones 4u in May last year, after 2,000 complaints on the retailer between December 2007 and February 2008. The retailer changed some aspects of its operation, particularly its repairs process after a high profile investigation from the regulator.
Ofcom chief Ed Richards said: ‘Ofcom wants to stamp out mis-selling in the telecoms market so that consumers can get the best that competition brings. Our announcements are designed to tackle misleading sales practices in landline and mobile services.’