New rules on mobile phone mis-selling

Wednesday, 16 September 2009 09:10

Mobile phone companies and firms selling mobile phones will be forced to stick to new rules to stop miss-selling.

Rules from the regulator Ofcom come into force today - following failed attempts to make phone companies hold to a voluntary industry code of conduct.

The new rules aim to stop those selling mobile phones from "engaging in dishonest, misleading or deceptive conduct".

This seems a harsh indictment of the industry if a special code of conduct has to to be introduced to make phone sellers honest.

Complaints have risen significantly recently over mis-selling, cashback schemes where cash does not come back, broken promises over coverage, and upgrades that hide longer contracts.

Since the new rules were proposed and the industry started to tighten its practices, the number of complaints has fallen from over 600 a month to 200 a month.

Given that many people fail to complain the industry does still face severe problems.

Ofcom advice for consumers on mobile phone mis-selling

Ofcom has uncovered a high number of problems.

In one case a consumer was told the tariff was £17 per month, however he ended up being charged £35 a month. When he refused to pay, the mobile phone company failed to deal with the problem. Instead they passed on the debt to a debt collection agency.

A further case saw a customer's contract being extended after his 16-year-old daughter - the main user of the phone - was pressurised into taking a new deal.

She claimed the agent that sold the deal said it was mandatory and the mobile phone company failed to back-track because the sale was through an agent.

One customer was sold a phone but the signal was poor. He was persuaded to pay for an upgrade and this did not improve the situation.

When he tried to break the contract, he was told he had entered an 18-month deal and would have to buy the phone to get out.

The new selling rules require mobile phone networks 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
  
• carry out certain due diligence checks in respect of their retailers

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