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08|02|07

Ofcom extends rules to prevent mis-selling

Ofcom today set out its intention to extend existing rules designed to prevent mis-selling by fixed line telephone providers. Ofcom considers that these rules work in the interests of consumers, protecting them from inappropriate sales practices and ensuring that they can shop around for better deals with confidence.

Mis-selling refers to inappropriate sales and marketing activities including ‘slamming’, where customers can be switched from one company to another without their express knowledge and consent.

In May 2005 Ofcom introduced new regulations designed to combat mis-selling. General Condition 14.5 requires providers of fixed-line telephony products to establish, then comply with, a code of practice for sales and marketing in accordance with Ofcom’s guidelines. These rules are currently scheduled to expire in May of this year. Ofcom today published proposals to extend these regulations past that point.

Ofcom also proposes that the General Condition be expanded to include providers of services using Local Loop Unbundling (LLU). While the number of complaints related to mis-selling of LLU services is currently low, the potential for consumer harm may increase as providers increasingly migrate customers to LLU. It is essential that customers feel protected from mis-selling in an increasingly competitive market.

In February 2006 Ofcom reviewed current approaches to migrations, switching and mis-selling across transferable voice and broadband products. It assessed whether a common switching process might better protect consumers from harmful excesses of a competitive market. Ofcom will complete this work during 2007.

Ofcom is seeking views on these proposals by 17 April 2007. See Related Items for the full consultation.

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