Ofcom UK Fines Axis Telecom GBP30k for Making it Hard to Change ISP

The UK communications regulator, Ofcom, has fined broadband and phone provider Axis Telecom (Axis) £30,000 for abusing the ‘Cancel Other‘ mechanism, which is designed to protect consumers from being switched to another ISP without their consent (slamming), and for “attempting to induce consumers to terminate their contract” with the new ISP.

The regulator claims that Axis, which has been in trouble with Ofcom before over similar concerns (the 2008 – 2009 case), contravened its related General Condition 24 (GC24 / GC24.14) rules between 26th May 2011 and 21st September 2011.

Ofcoms Statement

Axis contravened GC24 and specifically the provisions relating to the use of Cancel Other by:

* using Cancel Other for reasons other than those specified as permissible in GC24.14;

* failing to take reasonable steps to establish that Slamming and/or Failure to Cancel had actually taken place, as required by GC24.15, before using Cancel Other in cases of Slamming and/or Failure to Cancel;

* where Axis was the Losing Communications Provider, attempting to induce consumers to terminate their contract with the Gaining Communications Provider and/or remain in a contract with Axis, through the use of marketing statements or representations in its communications with the Customer, contrary to GC24.18.

Therefore, on 18 May 2012 Ofcom issued Axis with a Confirmation Decision under section 96C of the Act. The Confirmation Decision confirms the steps that Axis must take to comply with the Cancel Other requirements of GC24 and to remedy the consequences of its contravention. The Confirmation Decision also imposes a fine of 30,000 on Axis in respect of its contravention of GC24 during the Relevant Period. A non-confidential version of the Confirmation Decision is currently being prepared and will be published shortly.

At this point it might be worth including a statement from the boss of Axis Telecom, David Meyers, which was made in response to Ofcom’s separate migration consultation.

David Meyers, Managing Director Axis Telecom, said:

“From our point of the view the current process for transferring landline service provides no problems, it is our belief however that the use of Cancel other should be exended to be used as an objection to other competitors gaining customers when they are contracted to a supplier. This is allowed in the energy market and helps to protect customers when monitored properly.

The main issue is broadband migration, this needs to be made simpler, our suggestion is to get rid of the MAC code process as customers can’t be bothered to contact their supplier and when they do they are wonback or threatened by their existing provider.

To make this process efficient, we need a system like to the existing landline transfer process, whereby we can transfer customers on a like for like basis without the need for a code.”

Ofcom, which will continue to monitor the ISP for any further breaches, has also warned Axis to comply with its ruling and remedy the problem.