From tomorrow, telecoms companies in the UK will have to adhere to strict new Ofcom rules to stop the mis-selling and slamming of landline services, or face fines of up to 10 per cent of their turnover.
The new rules are designed to strengthen protection for consumers and enable Ofcom to take swift and more effective action against telecoms providers that break them.
Companies use a variety of sales and marketing activities to gain customers, the majority of which are carried out responsibly. However, some businesses attempt to gain customers through dishonest activities such as mis-selling, or slamming where customers are simply switched from one company to another without their knowledge and consent.
To ensure compliance with the new rules, Ofcom is opening a monitoring and enforcement programme.
It is not acceptable for consumers to suffer from companies engaging in dishonest sales and marketing activity. Ofcom will not hesitate to take enforcement action against firms who don’t comply with the new rules, said Ofcom Chief Executive Ed Richards.
The new rules, called General Condition 24, will:
• Prohibit telecoms providers from engaging in misleading and inappropriate sales and marketing activity and slamming;
• Require telecoms companies to keep better records of their sales and marketing activities;
• Confirm the type and level of information that needs to be made available to new customers both at the point of sale and after the sale has been concluded (but before the service has actually been transferred). This includes providing important information about the key terms and conditions of the service, including contractual liabilities and cancellation rights;
• Introduce new rules to make clear when providers are allowed to cancel orders placed by other providers. Cancelling orders for purposes other than those expressly specified by the regulations will be prohibited.
Slamming and mis-selling are the most complained about issues to Ofcom in the fixed line market, averaging about 750 complaints per month over the last year. Examples of mis-selling issues reported to Ofcom by consumers include:
Receiving calls from telecoms providers pretending to be another company;
Telecoms providers incorrectly advising consumers of package costs; and
Telecoms providers not properly informing consumers of any Minimum Contract Periods and
Early Termination Charges that might be applicable.
Ofcom has previously investigated 14 companies for breaches of the current regulations and has fined two companies the maximum 10 per cent of turnover for failing to comply.