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Ofcom Extends Fixed-Line Mis-Selling Probe

Posted: 31st Mar, 2008 By: MarkJ
Rises in complaints about new land-line phone services, such as those based off local loop unbundling (LLU), has caused Ofcom to extend its investigation into fixed-line mis-selling. Several unnamed providers are reportedly already being targeted for enforcement notifications.

The regulator also announced an industry-wide investigation into compliance with the obligation to be a member of one of the dispute resolution schemes (ADR), which are designed to deal with consumer complaints:

The investigation covers all types of mis-selling including:

  • slamming, where a consumer is switched to another provider without their knowledge;

  • when communications providers pass themselves off as other companies;

  • when communications providers fail to provide important information to consumers, for example, the minimum contract duration or details of early termination fees; and

  • when communications providers refuse or make it difficult for consumers to transfer to a different supplier.

Under Ofcom rules, all communications providers must join an independent dispute resolution scheme (such as Otelo or Cisas). The regulator can take action against providers who fail to join a scheme, potentially resulting in a fine of up to 10% of relevant turnover for non-compliance.

Ofcom's initial tightening of the rules during 2005 helped to reduce fixed line telephony mis-selling complaints from a peak of 1,200 per month in 2005 to around 350 per month in January 2008.
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