Since 16 March 2010, strict new rules have been in place to police mis-selling of telephone landlines. This follows Ofcom receiving high levels of complaints for several years about slamming and other unsavoury practices. Mark Smith connects to the new regime.
When: 18 March 2010
Law stated as at: 30 March 2010
Ofcom has introduced strict new rules to deal with the problems of "slamming" and mis-selling in the fixed-line telecoms industry.
The rules will allow Ofcom to take swifter and more effective action against companies which break the rules, which could face fines of up to 10% of their turnover.
Complaints from consumers about "slamming" and mis-selling have averaged 750 per month over the past year. Ofcom actually receives more complaints about these issues than any other in the fixed-line market. "Slamming" involves switching a customer from one company to another without their knowledge and consent. Examples of mis-selling include customers not being told of the correct package costs or not being informed that minimum contract periods and early termination charges may apply. Some telecoms providers have even made calls to consumers pretending to be a different company in order to make a sale.
The new rules, called General Condition 24:
• prohibit telecoms providers from engaging in misleading and inappropriate sales and marketing activity and slamming;
• require telecoms providers 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. This includes providing important information about key terms and conditions, such as contractual liabilities and cancellation rights;
• introduce new rules to make clear when providers are allowed to cancel orders placed by other providers.
Ofcom is implementing a monitoring and enforcement programme to ensure that the new rules are complied with.
Why this matters:
Ofcom has previously introduced rules to regulate the selling of mobile telephones (see General Condition 23), so it was arguably only a matter of time before it turned its attention to the fixed-line providers. The new rules represent a welcome move for consumers, as although many of the practices highlighted are already unlawful under the Consumer Protection from Unfair Trading Regulations 2008, it is likely that Ofcom will be more active than the OFT in taking action against offending telecoms companies.
The text of the new General Condition 24 can be found here: