Ref: 53/03
Date: 7 November 2003

Following an investigation of a complaint from Thus and BVL, and using new powers under the Communications Act 2003, the Director General of Telecommunications has ordered BT to stop using information about the transfer of customers to alternative telecoms suppliers to undertake marketing activity to dissuade these customers from switching.

Under current arrangements for some types of services, notably carrier pre-selection, a telecoms company has to notify BT when a customer intends to switch to its service, so that BT can make the necessary changes to its own systems to allow the transfer to take place.

Until now, BT has passed this information to its marketing department, which has then contacted the customer to try and persuade them to stay with BT. Oftel has today ordered BT to stop carrying out this practice, on the grounds that it is forbidden under the new EU Access and Interconnection Directive that came into force in the UK in July 2003.

This requirement affects BT when its customers switch to alternative carrier pre-selection operators, but will also apply to alternative service providers to prevent them from contacting their customers who want to switch to another operator.

In order to prevent slamming (where a customer is switched to an alternative supplier without their knowledge), both the gaining and losing carrier pre-selection service providers will continue to be obliged to write to customers notifying them of the change. This gives the customer the opportunity to cancel the change before it has taken place if it has been attempted without their prior consent.

David Edmonds, Director General of Telecommunications said today:

"Growing competition means that more and more consumers are switching service providers. There are now over two million BT lines with carrier pre-selection services, 40 per cent of consumers have changed suppliers, and four million telephone numbers have been switched by consumers to new operators.

"This is informed switching using a system which protects customers. BT and the gaining carrier pre-selection service provider are obliged to write to customers to confirm the transfer arrangements in order to ensure that customers are not being switched over without their knowledge or approval.

"However, in the past BT has used the notification from another operator that a customer is switching service provider to contact the customer and encourage them to stay with BT. Competitors to BT made a formal complaint and I have concluded that this is forbidden under the terms of the new Access and Interconnection Directive and I have today told BT that they must stop this practice.

"BT are entitled to target lapsed customers to encourage them to return to BT, but it cannot act upon the transfer notification received from alternative operators to carry out this activity."

Notes to Editors

1. ‘Notification of Contravention of General Condition 1.2 under Section 94 of the Communications Act 2003, Notice served on British Telecommunications plc by the Director General of Telecommunications’ has been published today on Oftel’s website at www.oftel.gov.uk/publications/licensing/2003/contra1103.pdf.

2. On 7 July 2003 Broadsystem Ventures Ltd and Thus submitted a joint complaint to Oftel in which they alleged that BT’s CPS marketing activity at the time of customer transfer was in breach of BT’s regulatory obligations.

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