Phones4U mis-selling probe welcomed by Birmingham MP
17 May, 2008
Speaking from Westminster today, Birmingham MP, Roger Godsiff, welcomed the news that the telecoms regulator, Ofcom, is to spend up to six months investigating over alleged mis-selling of mobile phone deals but said: ‘You have to wonder how many more customer complaints Ofcom has to receive and how many more investigations it has to undertake to really get hold of this problem.’
Mr Godsiff has let a campaign against ‘cash-back’ offers for a number of months following the collapse of the local mobile-phone retailer, Dial-a-Mobile, which went into administration leaving many former customers facing huge phone bills.
‘Again, it appears that ‘cash- back deals’ will be at the centre of this latest probe and it makes a complete mockery of undertakings voluntary or otherwise made by the network providers to clean up their act and those of the independent retailers that sell their phones and take up their contracts.
Ofcom is big on investigations but not so hot on protecting customers who are inconvenienced or swindled nor can it offer any remedy for those people who are pursued ruthlessly through debt collection agencies and the courts by the network providers who just clean up and move on.’
Mr Godsiff went on to say: ‘ I shall be writing to Ed Richards, Chief Executive, of Ofcom, impressing on him the need for a thorough investigation particularly in respect of the role played by the network providers but also for customers to receive compensation if there is a case to answer.’
Ofcom is drawing up a compulsory code of practice aimed at tackling cash-back offers which fail to pay out and cases of false information offered when buying a contract. Firms that do not comply with the rules could be fined up to 10% of their turnover.
Mr Godsiff in a previous letter wrote to Mr Richards expressing his concerns that the consultation document did not go into detail as to how the new proposals, if they were to be adopted, would be monitored, policed and the circumstances under which penalties for breaching the new code would be applied. He also raised the matter of customer compensation. To date he has not received a response from Ofcom to the points that he raised.
‘This latest investigation only serves to place a sharper focus on all of these issues and places a greater emphasis on Ofcom to be seen to be delivering.
Consumer group Which? has previously called for mobile phone cash-back offers to be banned, unless the cash-back comes automatically.
