Ofcom targets phone contract mis-selling
Companies could be fined 10% of turnover
16 September 2009 11:27 GMT / By Duncan Geere
Ofcom has announced a crackdown in the mis-selling of mobile phone contracts to consumers. A voluntary code of conduct had previously been implemented, but hasn't reduced the number of complaints received by the watchdog.
The rules have been simplified and offenders could be fined up to 10% of their turnover. Under particular scrutiny are so-called "Cashback" offers where the customer buys the phone up front and is then refunded the cash over the course of the contract.
As a result, some customers have been left with money owed to them when companies have gone bust. Other examples include promises of coverage but finding a lack of reception, and longer contracts being assigned automatically when upgrading from a 12-month contract.
Rules for landline providers are expected on 17 September.
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