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Telephones

Answer

Responsibility for mis-selling lies with the Office of Communications (Ofcom) which is committed to preventing problems related to mis-selling and slamming (where a telephone service is switched to another provider without the customer's knowledge or consent), and has put various safeguards in place to protect consumers from such risks.In May 2005 Ofcom introduced new rules to combat slamming, which require all providers of fixed-line telecommunications services to residential consumers and small to medium sized enterprises (SMEs) to establish, and comply with, a sales and marketing code of practice consistent with Ofcom guidelines. Compliance with the codes is enforceable by Ofcom under the Communications Act and they can require telecoms providers to remedy the consequences of any breach and can ultimately levy a financial penalty (up to 10 per cent. of relevant turnover) if they do not do so.In June 2006 Ofcom imposed the maximum financial penalty of 10 per cent. of relevant turnover on Just Telecomms UK Ltd (trading as Lo-Rate Telecom). This decision reflected the serious nature of the contravention. In addition to imposing a financial penalty, Ofcom is also requiring this company to:"pay refunds to affected customers where appropriate;""provide weekly reports to Ofcom on customer contact and refunds paid; and""fully co-operate with, and comply with the adjudications of, the Telecommunications Ombudsman scheme (Otelo)."Ofcom also monitors complaints received through its Advisory Team concerning instances of slamming and they will take action against providers who persistently act contrary to the guidelines.There are a number of safeguards built into the switching process. Customers must be sent a 'notification of transfer' letter informing them that the switch is happening. There is a 10 day switchover period during which time the customer is able to stop the order going ahead. Typically the customer will receive two letters during the switchover period—one from both their losing and gaining telephone companies.Ofcom is currently consulting on proposals to strengthen the existing safeguards in this area in order to ensure better protection for consumers and to enable it to take more effective action against providers that break the rules. The consultation closed at the end of May and Ofcom is now reviewing the responses, and expects to publish a statement later in the year.

Secondary information

Type

Written question

Reference

496 c1750-1W; 281715

Session

2008-09

Subjects

Telecommunications Unfair practices

Link

View this Written question on www.publications.parliament.uk