Voluntary code fails to stem complaints
Under measures that came into force at midnight in the UK, mobile service providers will now have to adhere to new Ofcom rules designed to prevent mobile mis-selling. The new rules prohibit mobile service providers and those selling their products and services from engaging in 'dishonest, misleading or deceptive conduct'.
If providers breach the rules they could be fined up to 10 per cent of relevant turnover.
Following a significant increase in the number of complaints about cashback schemes and other forms of mis-selling in the mobile market, the mobile network operators introduced a voluntary Code of Practice in July 2007 to tackle mis-selling and cashback issues. This voluntary Code did not lead to a significant reduction in complaints. So in March 2008, Ofcom proposed new mandatory rules – called a General Condition.
Since it proposed to introduce new rules, Ofcom says complaints have fallen from over 600 to fewer than 200 per month.
The new rules include, but are not limited to, requirements for mobile network operators to:
– not mis-sell mobile phone services;
– 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.
Mis-selling complaints
Examples of mis-selling complaints from consumers include:
– finding themselves signed up to a more expensive tariff than agreed at point of sale;
– upgrading their 12 month contract believing they are signing up to another 12 month contract and then finding themselves entering into a new 18 month contract; and
– signing up to a service after being told coverage in their area is good but then finding that they have little or no reception.
Ofcom says it will now monitor communications providers' adherence to the rules.