Ofcom targets mobile mis-selling

Ofcom has vowed to stamp out "misleading" selling practices by mobile phone operators.

The telecoms regulator unveiled plans to introduce mandatory rules preventing mobile phone sellers from misleading customers after a warning last summer failed to change selling practices.

Last July five mobile phone operators signed a voluntary agreement defining acceptable marketing and selling tactics, either through themselves or through third parties. But since then, Ofcom said complaints from members of the public had increased from 460 complaints during July 200 to around 700 in January this year.

The main targets of the new proposals are cash-back promotions that do not reimburse customers, and sellers giving false information in the hope of selling a product.

If they are adopted, a General Condition, legally enforceable under the Communications Act 2003, will be introduced. Companies that do not comply with the rules could be fined up to 10% of relevant turnover.

The new General Condition will require mobile phone operators not to deceive customers or mis-sell products, make sure customers intend and are authorised to enter into a contract, and make sure the terms and conditions of cash-back deals are fair.

It would also make operators check retailers selling their products were following the same rules, and insist customers received all the information necessary before parting with their money or signing a contract.

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."

A spokesman for O2 said: "We welcome Ofcom's consultation. It's important that consumers are protected against the minority in the market who are causing problems."

Ofcom will consult on the plans until the end of next month, and hopes to introduce them by summer.

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