Own-initiative monitoring and enforcement programme into Mobile Service Provider’s compliance with General Condition 23 in respect of their sales and marketing practices

18 March 2010

Complainant: Ofcom own-initiative
Complaint against: Mobile Service Providers
Case opened: 16 September 2009
Case closed: 15 March 2010
Issue: Compliance with the requirements set out in General Condition 23 in relation to the sale and marketing of mobile telephony services.
Relevant instrument: General Condition 23 of the General Conditions of Entitlement

Ofcom is today announcing the closure of the GC23 monitoring and enforcement programme (GC23 Programme) which was opened in September 2009, following the introduction of new rules regarding the sale and marketing of mobile telephony services.

Since Ofcom proposed to introduce new rules to protect consumers from mobile mis-selling, complaints have fallen from an average of over 600 to 160 a month.

Furthermore, since the introduction of the new rules and the opening of the GC23 Programme in September 2009, complaints have reduced further to an average of 130 per month across all MSPs. Cash back related complaints have reduced even more notably and now account for less than 20 per month across all MSPs.

Prior to, and during the GC23 Programme, the MSPs have introduced a range of measures to ensure compliance with GC23. These include, but are not limited to:

  • informing their customers of GC23 (via their website and printed copies available on request); implementing various forms of training for staff on the requirements of GC23;
  • amending, where necessary, their contracts with retailers to ensure compliance with GC23;
  • updating information available at point of sale to reflect the requirements of GC23 (ensuring they use reasonable endeavours so that customers understand the contract they are entering into) and updating telesales scripts and online content;
  • implementing additional due diligence checks in respect of retailers they contract with; and
  • making changes to point of sale information in respect of sales incentives (ensuring they use reasonable endeavours so that the terms of any incentive are not unduly restrictive and the customer is provided with clear and accurate information in relation to the incentive).

Whilst Ofcom notes improvements have been achieved across the mobile telephony industry, we will continue to actively monitor mobile mis-selling complaints. We have written to each of the MSPs informing them that should we see an increase in complaints, or identify concerns relating to any MSP, we will not hesitate to open individual investigations under GC23, details of which would be published on the Competition and Consumer Enforcement Bulletin.

Text published when case was opened

Today General Condition 23 (GC23) comes into force (see related item), imposing obligations on Mobile Service Providers (MSPs) in relation to their sales and marketing practices in order to protect consumers from mis-selling of mobile telephony services.

GC23 prohibits providers from engaging in dishonest, misleading or deceptive conduct, aggressive conduct or contacting the customer in an inappropriate manner. Amongst other things, GC23 also sets requirements on MSPs:

  • to give customers the accurate information they need when they buy the product;
  • to check the customer is authorised to, and intends to, enter into a contract;
  • to train staff appropriately;
  • to carry out due diligence and a number of checks in respect of their retailers to ensure that they are fit and proper to sell the services on the MSPs behalf; and
  • to check that the terms and conditions of sales incentives offered by their retailers are not unduly restrictive.

To ensure MSPs comply with the requirements of GC23, Ofcom has launched a monitoring and enforcement programme.

Under the monitoring and enforcement programme, we will monitor trends and examine complaints received by Ofcoms Advisory Team and also, where appropriate, Consumer Direct. Where there is evidence of potential non-compliance we will take appropriate and proportionate action under this programme. If necessary, we will take action through separate investigations of named MSPs which will be announced via Ofcoms Competition and Consumer Enforcement Bulletin.

If you are a consumer and would like advice in relation to mobile mis-selling please contact Ofcom's Advisory Team on 020 7981 3040 or 0300 123 3333

Case Leader: Miriam Martin - email: Miriam.martin@ofcom.org.uk
Case Reference: CW/01035/09/09