Ofcom’s General Condition 23 came into effect at midnight last night, meaning mobile service providers will have to adhere to new Ofcom rules against mis-selling.
The new rules prohibit mobile service providers and their resellers from engaging in dishonest, misleading or deceptive conduct. A breach of rules could result in service providers being fined up to 10 per cent of their turnover.
The condition was introduced following what Ofcom has labelled “a significant increase in the number of complaints about cashback schemes and other forms of mis-selling in the mobile market”, and the lack of success of a voluntary Code of Practice created in July 2007 to tackle mis-selling and cashback issues.
Ofcom claims that since it proposed to introduce the new rules, customer complaints have fallen from more than 600 per month to less than 200.
The new rules include requirements for mobile network operators to not mis-sell mobile phone services; 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 on their retailers.
Ofcom will now monitor communications providers’ adherence to the rules.
Editor of mobile phone comparison website Omio.com, Ernest Doku, commented: “It’s good news to see Ofcom step in and referee the murkier side of mobile phone sales. Hopefully this will spell the end of the various confusing and misleading deals that have caught so many people out in the past.
“Although retailers now have a legal obligation to provide clear information on exactly what prospective buyers are getting themselves into, consumers must still be cautious and must still ask questions to ensure they’re getting the right product and deal.
“With some contracts running for as long as 36 months, shoppers have to take a very good look at the small print before signing on the dotted line, or they could still end up paying way more than they bargained for.”