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Ofcom Clamps Down On Mobile Mis-Sellers

Last year the UK government watchdog, Ofcom, asked mobile operators to sign up to a voluntary industry code for a best practice approach to marketing and selling mobile services, either directly or through third-party sales agents. It was a great idea, but it didn’t work. Before the code, Ofcom was receiving just over 450 complaints a month. After its introduction, those soared to around 700 a month. And that’s why the body is proposing new rules. Under them, operators will be forced:

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

The penalty for breaching the rules could up to 10% of relevant turnover. The proposals are currently in a consultation phase, but Ofcom hopes to have them in place by this summer. Ofcom Chief Executive, Ed Richards, said,  “The UK has one of the more competitive mobile phone sectors in the world. But strong competition is no excuse for marketing malpractice. We warned the industry last year that unless it cleaned up its act we would consider introducing new rules. The facts show that this hasn’t happened, so we are now proposing tougher measures to protect consumers from unacceptable sales and marketing practices.”

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