Own-initiative investigation into Telephonics Integrated Telephony Limited – adherence with its Code of Practice for sales and marketing

09 November 2009

Complainant: Ofcom own-initiative investigation
Investigation against: Telephonics Integrated Telephony Limited (Telephonics)
Case opened: 24 June 2009
Case closed: 18 December 2009
Issue: Adherence to the requirement to comply with a code of practice for sales and marketing
Relevant instrument: General Condition 14.5 of the General Conditions of Entitlement.

Ofcom has been investigating two aspects of Telephonics conduct. Details of the first, in respect of Telephonics behaviour when customers wish to transfer to another communications provider are set out in a separate Bulletin entry available at: (http://www.ofcom.org.uk/bulletins/comp_bull_index/comp_bull_compcases/cw_998/) (the First Own-initiative Investigation). This investigation was closed on 20 March 2009 but the case remains open in our compliance phase as we are currently enforcing compliance with the penalty and enforcement notifications which were issued under sections 95 and 96 of the Communications Act 2003, as a result of our investigation.

This second investigation is in relation to Telephonics adherence to its code of practice for sales and marketing (the Second Own-initiative Investigation) and was opened on 24 June 2009, following a notable increase in the level of complaints alleging mis-selling, received by Ofcoms Advisory team (OAT), during April and May 2009.

General Condition 14.5 (GC 14.5) requires that communications providers establish and comply with a code of practice for sales and marketing (the Code). The purpose of the investigation was to examine whether there were reasonable grounds for believing that Telephonics had failed to comply with the requirements of its Code.

We carried out some initial investigation into Telephonics compliance with GC14.5 and engaged directly with Telephonics on this matter. We also note that there has been a considerable reduction in complaints alleging mis-selling by Telephonics since the opening of the investigation.

Given that the number of mis-selling complaints has decreased significantly, we have decided to focus our efforts and resources on Telephonics behaviour in relation to the enforcement and penalty notifications issued under the First Own-initiative Investigation on 27 August 2009.

Accordingly, we have decided, on the basis of administrative priority, to close the Second Own-initiative Investigation into Telephonics in relation to its adherence with its Code. We will however, continue to closely monitor Telephonics behaviour under our monitoring and enforcement fixed-line mis-selling programme, (http://www.ofcom.org.uk/bulletins/comp_bull_index/comp_bull_ocases/open_all/cw_960) and will not hesitate to open a new investigation should it become appropriate to do so.

An update on our actions in relation to the First Own initiative Investigation into Telephonics will be available shortly at: http://www.ofcom.org.uk/bulletins/comp_bull_index/comp_bull_compcases/cw_998/

Text published when case was opened

Ofcom has opened an own-initiative investigation into Telephonics following an increase in the level of complaints alleging mis-selling, received by Ofcoms Advisory team, over recent months.

General Condition 14.5 requires that communications providers establish and comply with, a code of practice for sales and marketing (the Code). The investigation will examine whether there are reasonable grounds for believing that Telephonics has failed to comply with the requirements of its Code.

Ofcom is continuing to monitor Telephonics behaviour in relation to the section 94 Notification issued to it on 20 March 2009, concerning General Condition 1.2. Please see http://www.ofcom.org.uk/bulletins/comp_bull_index/comp_bull_compcases/cw_998/ If you are a consumer and wish to discuss either case please contact Ofcom's Advisory Team on 020 7981 3040 or 0300 123 3333. Case Leaders: Mark Thorndike (Mark.Thorndike@ofcom.org.uk) and Miriam Martin (Miriam.Martin@ofcom.org.uk)

Case Reference: CW/01028/06/09