Ofcom Slaps UK ISP True Telecom with £300k Fine for Mis-Selling

Troubled phone and broadband ISP True Telecom, which went into administration at the end of last month (here), has now been hit with yet another major problem after Ofcom slapped them with a £300,000 fine for mis-selling their landline telephone services to over 100 people.

So far the provider has already been fined £85,000 by the ICO for “making illegal nuisance calls” that gave “the impression they were from BT” (here). In August 2017 a lengthy investigation by Ofcom also separately found “reasonable grounds for believing” that the Kent based broadband ISP may have breached several consumer protection rules over their handling of service migrations and contracts, not least by SLAMMING.

Slamming is a mis-selling practice that can occur when naughty people trigger a switch (migration) of your service to another provider, without you ever having given confirmed consent. The regulator’s existing migration rules and related General Conditions (GC) are designed to protect against such abuse, but problems can still occur.

Having considered the evidence, which included analysis of almost 250 sales call recordings, Ofcom ultimately found that True Telecom repeatedly broke four separate rules, over the course of a year.

True Telecom’s Rule Breaking

* Engaging in a particularly aggressive form of mis-selling known as ‘slamming’; 24 people had their landline telephone services transferred to True Telecom without their authorisation;

* Placing repeat transfer orders; 86 customers cancelled True Telecom’s initial order to take over their landline telephone service, but the company made repeated subsequent attempts to transfer them across regardless;

* Entering customers into banned lengthy contracts; 35 residential customers were incorrectly signed up to 36-month contracts, which were banned by Ofcom in 2011; and

* Failing to keep and retain records of consent; True Telecom did not have proof of consent to switch to the company for 21 customers.

In addition to the fine, Ofcom is requiring True Telecom to reimburse affected customers and they must allow them to exit their contracts without penalty. “To ensure compliance with Ofcom’s sales and marketing rules, we are also requiring that True Telecom re-trains its frontline sales staff, and makes all necessary changes to its policies and procedures,” said the regulator.

However the regulator does recognise that the ISP has now gone into administration, although they add that “customers will continue to receive services and the penalty levied today remains payable.” Further details can be found on Ofcom’s Investigation Page, although it seems increasingly unlikely that the regulator will get any money out of them.

The decision may also make it more difficult for True Telecom to find a buyer (who wants to buy such a tainted brand?), which suggests that a more likely outcome might be some sort of asset sale (e.g. selling off the customer base to another provider).