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Watchdog clamps down on telco mis-selling

18th Mar 2010
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Telcos that engage in dishonest practices to win over new landline customers will in future face fines of up to 10% of turnover based on new rules from Ofcom that come into force today.

The watchdog said that it received more complaints about mis-selling and 'slamming' – an activity whereby consumers are simply switched from one company to another without their knowledge or consent - than any other practice in the fixed line market. Such complaints averaged about 750 per month over the last year.

Typical examples of mis-selling, meanwhile, included customers receiving calls from telecoms providers pretending to be another company and misinformation regarding total package costs. Others were not told that Minimum Contract Periods or Early Termination Charges may apply.

Ed Richards, Ofcom’s chief executive, said: "It is not acceptable for consumers to suffer from companies engaging in dishonest sales and marketing activity. Ofcom will not hesitate to take enforcement action against firms that don’t comply with the new rules."

The new rules, dubbed General Condition 24, will prohibit telcos from engaging in misleading and inappropriate sales and marketing practices, which includes slamming.

They will also need to keep better records of such sales and marketing activity and confirm the type and level of information that has to be made available to new customers both at the point-of-sale and after the sale has been concluded.

New rules will also be laid down to clarify when providers are allowed to cancel orders placed by rivals. The watchdog likewise intends to introduce a new monitoring and enforcement programme to ensure that its regulations are adhered to.

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