Mobile networks face fines of 10 per cent of their yearly turnover if their retailers – direct or indirect – are found in breach of Ofcom’s new mis-selling rules announced today.
Ofcom said the average number of complaints about mobile mis-selling over the last six months have been around 200 a month.
Ofcom’s new rules state that providers must not engage in misleading conduct and ensure that those selling their products and services also do not mis-sell; make sure the customer intends and is authorised to enter into a contract; make sure consumers get the information they need at the point of sale; make sure that the terms and conditions of cash back deals offered by their retailers are not unduly restrictive; and carry out certain due diligence checks in respect of their retailers.
The new rules come into force in September. Ofcom will then start an enforcement programme to monitor communications providers and hand out a fine if necessary.
Ofcom chief executive Ed Richards said: “Ofcom wants to stamp out mis-selling in the telecoms market so that consumers can get the best that competition brings. Our announcements are designed to tackle misleading sales practices in landline and mobile services.”