Godsiff calls for cash back contracts to be torn up
05 March, 2008
Responding to correspondence sent both to the Secretary of State, John Hutton, at the Department for Business, Enterprise & Regulatory Reform and Ofcom by Sparkbrook and Small Heath MP, Mr Godsiff, Ofcom, the mobile industry regulator, has announced that it has decided ‘to launch a formal review into the problems in the mobile retails sector, to look to see if a set of formal regulations backed up by the full weight of Ofcom’s legal powers, would provide better protection for consumers’.
Whilst welcoming this news as ‘significant progress’ Mr Godsiff was nevertheless concerned for the literally thousands of former customers of the Mobile Connections/Dial a Mobile Group who are currently faced with maintaining payments on expensive airtimes contracts without their cash back refunds being honoured.
Mr Godsiff said: ‘Ofcom does not offer any solution to this massive problem other that to say that it is having further discussions with operators and seems to be leaving the back door open for operators when it says that it “accepts that retailer contracts in this case may have been concluded prior to the launch of the voluntary code”. Ofcom does however acknowledge that “problems have emerged in part as a result of a lack of due diligence of the part of the operators”.
Mr Godsiff continued : ‘There has been a lot of hand ringing and pious words spoken within the industry and outside about how the time for ‘cash back’ is now over but this hasn’t stopped airtime providers chasing customers for full payment of contracts, legal action and reference to debt collection agencies and all that means for your credit rating. And lets not forget that in July, through Ofcom, the mobile phone industry signed up for a new code of practice which as Ofcom states in their letter to me makes “operators responsible for checking out their distributors and retailers they use to sell or promote their services and for ensuring they comply with the code”. Ofcom admits that this voluntary code has not worked.
He concluded: ‘With Administrators called in to deal with Dialamobile estimating that as much as £12m is owed in cashback payments I think that it is time for the operators to draw a line in the sand on this sorry episode and if customers are prepared to return their phones, tear up existing contracts whether they exist on paper or not. I think that that is the very least the operators can do.
