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Ofcom Fine ISP Unicom GBP200K for “mis-leading” Sales and Marketing

Wednesday, July 29th, 2015 (11:38 am) - Score 1,603
unicom

The UK telecoms regulator has today fined Unicom (Universal Utilities) £200,000 for misleading consumers over the sale of their fixed line telecommunications services (between the 1st March 2013 and 8th July 2014).

Ofcom has been investigating the ISP for well over a year now and focusing its efforts upon whether or not Unicom had complied with their obligations under General Condition 24.3, which covers “mis-selling” and related marketing matters.

Over the past few years ISPreview.co.uk has also received a small string of historic (2009-11) complaints about the provider, with common allegations suggesting that Unicom would sometimes fail to make clear that their broadband services came with a 3 year contract (phone orders) and or refused to issue migration codes (MACs) for those who wanted to leave.

Lest we not forget that Unicom was also mentioned as part of a Parliamentary debate, raised by John Healey MP in the House of Commons on the 26th November 2014, in which Healey named Unicom as a “shameful predatory company” (here).

Claudio Pollack, Ofcom’s Consumer and Content Group Director, said:

Small businesses in the UK increasingly rely on high-quality communications services. Service interruptions and unexpected costs can cause a real concern for these customers. Ofcom does not accept misleading practices and we will take action against companies that break the rules.”

Suffice to say that Ofcom’s investigation has now concluded that Unicom provided “mis-leading information to some prospective customers“. For example some were told that, upon transferring their fixed voice services to Unicom, they would not incur Early Termination Charges (although some did because they were still under contract with their old ISP) and would experience no effect on their existing broadband services, which was also wrong.

Ofcom’s Statement on Unicom

The Confirmation Decision confirms the imposition of a penalty on Unicom of £200,000 in respect of its contravention. It also confirms steps that Unicom must take to comply with the requirements of GC24.3(a) and to remedy the consequences arising from its contravention.

In particular, to the extent it has not already done so, the steps which Ofcom confirms must be taken by Unicom to comply with the requirements of GC24.3(a) are:

a) making all necessary changes to its policies, procedures, marketing materials and sales scripts and/or guidance to sales staff;

b) providing appropriate further training to sales staff; and

c) implementing an effective quality assurance process to monitor compliance by Unicom’s agents with the requirements of the relevant GCs.”

Unicom has also been told to compensate any customers that were impacted by their practices (this includes covering the cost of any reconnection charges for those customers where they choose to return to their previous provider) and to let them out of their contracts penalty free. Ofcom has said that they intend to monitor Unicom’s progress on all of this in order to ensure compliance.

Meanwhile the £200,000 fine, which must be settled within 20 working days, is payable to Ofcom and then passed on to HM Treasury.

Leave a Comment
3 Responses
  1. Avatar Jazmin

    This company’s Newcastle office have made my life a misery for years. Daily phone calls to my three office landline numbers asking to speak to the person who deals with the business landline. They’ve even phoned my works mobile and asked if I want a landline and when I’ve said “No” the reply is “Why not”.

    When asked repeatedly to be taken off their database, even speaking to senior managers at their Newcastle and Manchester offices they continued to repeatedly call me on a near daily basis. They’re clever too they always call on withheld and business are more likely to accept withheld calls than residential customers. Most calls in one day from them was 6. Different person each time. When I asked to be removed, one staff member told me “We can ring anyone we like that’s in the phone book, go unlisted if you DONT want calls”

    Rude ignorant arrogant horrible people

    I hope they go bankrupt

  2. Avatar PeterM

    My father was caught out by this company when they rolled over his contract and then fleeced him when he switched.
    I notice they have a separate complaints website with a step by step complaints procedure. I guess this will be well used over the next few months.
    Ofcom may well have to do a lot of monitoring!

  3. Avatar Busterbobs

    It is interesting that Universal Utilities / Unicom have registered a change of name at Company House on the 9th October 2015 and they are now called VERASTAR. Same Company Reg No 03667643, same VAT Reg No 945 795467 and and same trading address but a different company name and website http://www.verastar.co.uk.

    The new Verastar web site http://www.verastar.co.uk lists the Universal Utilities / Unicom history but makes no mention of Unicom Telecom or Universal Utilities. Also the domain name was registered on the 15th July 2015; just two weeks before Ofcom announced the £200,000 fine of Unicom for mis-selling

    Check out http://www.unicom-complaints.co.uk

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