Clamp down on dodgy phone salesNew consumer protection against phone slamming

19 March 2009

Ofcom logo

New phone selling rules have been revealed by Ofcom that will help protect consumers against 'phone slamming' and other misleading sales and marketing practices in the domestic and mobile phone markets.

'Phone slamming' is the practice of switching a home phone service to another provider without the users permission - a practice that has seen nearly 1,000 complaints flood in to Ofcom each month.

Ofcom, the UK phone and mobile watchdog, has already put rules targeting mobile misselling in place, and the organisation has proposed other rules to protect consumers against 'slamming' and other misleading sales practices in the home phones market.

Our Which? home phone services review compares the price and package details of popular home phone companies including  BT, Virgin Media, and Sky.

Slamming complaints high

The new and proposed phone rules follow high levels of consumer complaints about mobile and home phone misselling, in particular home phone slamming.

Home phone slamming – where a home phone user is switched to another telephone provider without their knowledge or permission – resulted in almost 1,000 complaints a month to Ofcom over the past year.

Stamping out phone slamming

Under the proposed rules targeting home phone slamming and other phone misselling, home phone service providers and retailers must keep better records of sales, including voice recordings of all telephone conversations.

Home phone providers and retailers must also give better information to consumers by reminding them that there may be consequences from switching, such as possible termination charges for leaving a contract early. Ofcom will also make it explicitly clear in its overarching rules for phone and communications providers that misselling is banned.

Better mobile protection

Mobile network operators 3, O2, Orange, T-Mobile and Vodafone introduced a voluntary Code of Practice in July 2007 to tackle mobile misselling and cashback issues.

Although complaints about mobile cashback deals have fallen, complaints about mobile sales problems have remained fairly high, so phone regulator Ofcom has introduced new rules relating to mobile phone sales to protect consumers better.

According to the new rules, mobile phone providers must:

  • not engage in dishonest, misleading or deceptive conduct and put provisions in place to ensure that those selling their products and services similarly do not mis-sell;
  • make sure the customer intends and is authorised to enter into a contract;
  • make sure consumers get the information they need at the point of sale;
  • make sure that the terms and conditions of cash back deals offered by their retailers are not unduly restrictive; and
  • carry out certain due diligence checks in respect of their retailers.

The new rules will come into force in September 2009. If mobile phone providers breach the rules they could be fined up to 10 per cent of relevant turnover.

Find out more about your rights in our guide to cancelling a mobile phone contract early.

Phone service providers held accountable for all misselling

The new rules for mobiles and proposals for home phones put the responsibility for preventing misselling firmly in the hands of the providers of home phone and mobile phone services, including BT, Virgin Media, O2 and Vodafone.

Often, dodgy phone sales are carried out by third party resellers of phone services – for example you might receive a call from a retailer pretending to be calling on behalf of BT, Orange or Vodafone, but in fact the salesperson is from a retailer that sells on phone services, and not from the phone provider itself.

Which? phones expert Ceri Stanaway says: ‘Historically phone misselling has revealed a bit of a gap in consumer protection.

‘Phone watchdog Ofcom has no power over third-party phone service resellers, and direct phone service providers have often denied responsibility for actions taken by resellers.

‘We hope that making home phone and mobile operators ultimately responsible for preventing misselling – to the point where they risk a large fine if they fail to properly monitor and police the retailers that sell on their services – will help ensure that consumers are better protected against dodgy phone sales practice.’

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