Original URL: http://www.theregister.co.uk/2006/02/09/ofcom_consumer/

Ofcom acts to improve consumer protection

Slowly does it

By Tim Richardson

Posted in Networks, 9th February 2006 16:53 GMT

Ofcom has published a stack of proposals about how to improve consumer protection for millions of UK phone and broadband users, kicking off ten weeks of consultation during which it will look to thrash out a number of proposals to keep UK consumers safe from rogue or incompetent operators.

In a nutshell, the regulator wants to increase consumer protection by installing an improved early warning system to raise awareness of scams and misselling in the communications sector, backed by "quicker and more targeted action" to address issues of concern to consumers. It also wants to see how current complaints processes can be improved, and provide access to "reliable and useful data to inform their choices in a competitive market".

According to the consultation document*, Ofcom's aim is to "work together with other organisations and industry to ensure that consumers benefit from increasingly competitive communications markets, are effectively protected from financial and physical harm, unreasonable annoyance and anxiety, and have the information and tools necessary to make informed choices."

Much of Ofcom's desire to improve consumer protection comes from increased competition with consumers able to source their telecoms service from scores of different providers. But with improved choice comes the greater chance that something might go wrong - either as a genuine mistake or by operators deliberately setting out to rip-off punters.

This is acknowledged by Ofcom who noted: "Consumer protection is particularly challenging in the communications sector, because modern communications systems provide ineffective or dishonest providers with easy and efficient access to consumers, and because new technologies can give rise to new forms of harm. Though desirable in other respects, the growth of competition can also contribute to consumer protection problems, as it can lead to a rise in unfair selling practices and may be associated with an increase in 'hit and run' behaviour by dishonest providers."

Indeed, the regulator points out that when it comes to rogue internet diallers, silent calls, misselling, and misleading advertising, it has adopted an "increasingly vigorous approach to consumer protection". Yet, there is still one area where Ofcom has yet to make the right noises regarding consumer protection.

Last year, broadband ISP Bulldog was investigated by Ofcom amid hundreds of complaints from punters who said they had been left without phone and broadband services. Complaints reached such a level in June, July and August that Bulldog's undermanned customer support service was almost permanently engaged. Despite widespread media coverage and hundreds of complaints, it took Ofcom until the last day of August before it finally intervened and opened an investigation.

For many caught up in the Bulldog debacle, this was too little, too late, and exposed a yawning gap in the role of the regulator and its willingness to protect the best interests of consumers. Even now, if there is a telecoms cock-up that affects large numbers of people who all complain to Ofcom, the regulator's response is that it will monitor the situation to see if there is a clear pattern of complaints. Under its current approach, it is only once a clear pattern has been identified - in the case of Bulldog, it took more than two months - that the regulator will consider investigating.

One recent press report suggested Ofcom was proposing to introduce a new watchdog - "CommsWatch", if you like - which would be charged with keeping a close eye on the industry and handling customer complaints. But a spokesman for Ofcom told El Reg it was unlikely such a body would be created. So, back to square one.

The importance of proper consumer protection cannot be overstated. Ofcom has gone out of its way to liberalise the UK's telecoms sector, to create an environment that will nurture competition. And it's working. Millions are being invested in local loop unbundling (LLU) including AOL, Carphone, Sky and Wanadoo, and the predictions are that as many as three million lines could be unbundled this year alone.

For many people, they won't know it's happening because their broadband line will be moved as part of a bulk migration. Fine, if it all goes well. But there's always the chance things might not go to plan. Likewise, in the competitive world that Ofcom has helped create, there are bound to be casualties. What then? Ten weeks of monitoring the situation, or action from a regulator that is serious about consumer protection? ®

* Details of Ofcom's consultation can be found here. The closing date for submission is April 19.