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10|11|08

Phones 4U commits to stop breaches of consumer law

Ofcom has received legally-binding undertakings from Phones 4U committing them to change a number of their practices which will stop them from breaching consumer protection laws relating to the sale of mobile handsets and contracts.

A six month joint Ofcom-Staffordshire Trading Standards investigation found that Phones 4U had breached several consumer protection laws by:

• not providing customers with a refund when they returned faulty handsets within a reasonable period of time, that were purchased directly from Phones 4U;
• including unfair terms in their handset return policy;
• using unfair terms contained in ‘chequeback’ schemes; and
• making misleading, false or deceptive representations or omissions to consumers about matters such as network coverage in particular areas, or what was included in their mobile phone plan.

Since the investigation began Phones 4U has made changes to a number of its consumer policies and processes, in particular its:

• handset return policy;
• ‘chequeback’ terms and conditions;
• sales practices, particularly relating to informing consumers what their network coverage will be, what their mobile plan will contain and cancellation rights and upgrades.

Phones 4U has cooperated fully during the investigation leading to a substantial reduction in complaints. In addition, Phones 4U implemented changes to its staff training procedures and operations which enabled Ofcom to swiftly complete its investigation. Ofcom, in conjunction with Staffordshire Trading Standards, will monitor complaints in relation to Phones 4U to make sure that it complies with the undertakings.

If Phones 4U breaches the undertakings then Ofcom can apply to the High Court or County Court for an Enforcement Order to stop it engaging in a particular practice (after giving them an opportunity to respond).

If a company breaches an Enforcement Order then it is in contempt of court which could lead to a substantial fine.

Full details of the case can be found here: http://www.ofcom.org.uk/bulletins/comp_bull_index/comp_bull_ccases/closed_all/cw_985/

Earlier this year Ofcom published a range of proposals to further clamp down on mobile mis-selling. Details of the proposals can be found here: http://www.ofcom.org.uk/media/news/2008/03/nr_20080318.

Ends.

NOTES FOR EDITORS

1. More information for consumers about mobile mis-selling can be found at: http://www.ofcom.org.uk/media/mofaq/telecoms/mmfaq/.

2. Ofcom is the independent regulator and competition authority for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services.

3. For further information about Ofcom please visit: www.ofcom.org.uk . Ofcom’s news releases can be found at: www.ofcom.org.uk/media/.

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