Original URL: http://www.theregister.co.uk/2009/03/17/ofcom_mis_selling/

Ofcom makes network operators carry mis-selling can

Grown-up responsibilities

By Bill Ray

Posted in Mobile, 17th March 2009 12:35 GMT

UK regulator Ofcom has made good on its promise to punish network operators who allow their services to be mis-sold, insisting that operators take responsibility from September this year.

Resellers will have to keep better records of the sales process, including recordings of all telephone calls relating to the sale, and conform to a more stringent code of practice - but if they don't it will be the network operator who risks a fine of up to ten per cent of turnover.

Ofcom's power is restricted to providers of communication services, not third-parties who sell those services, so the regulator is forced to put pressure on the network operators in the hope they will police their resellers. The rules follow the failure of a voluntary scheme set up in July 2007, and was first mooted a year ago, but with Ofcom still receiving several hundred complaints about mobile contract mis-selling every month, the problem is clearly not going away on its own.

The new rules (pdf) include some remarkable clauses including an undertaking "not to engage in dishonest, misleading or deceptive conduct"... which one might have hoped was already against the law. Punters can also expect conforming companies to "make sure the customer is authorised to, and intends to, enter into a contract".

The fact that Ofcom needs to be so explicit shows the endemic nature of such underhand practices; just about everyone with a mobile phone has received calls trying to get them to switch networks, and most people know someone who has been suckered into a slammed sale. Network operators will take action if callers are passing themselves off as representing the operator (a common misrepresentation), but otherwise they are generally reluctant to act. Threatening them with huge fines may be excessive when the operator is not at fault, but it's the only stick that Ofcom has to wield. ®