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

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.