Own-initiative investigation into the TalkTalk Group concerning compliance with General Condition 24 – sales and marketing of fixed-line telecommunications services

08 July 2011

Complainant: Own-initiative investigation following complaints from members of the public.
Complaint against: TalkTalk Group Ltd (TTG)
Case opened: 19 November 2010
Investigation closed: 19 May 2011
Case closed: 30 September 2011
Issue: Whether TTG has complied with its obligations under General Condition 24
Relevant Instrument: General Condition 24 (GC24) of the General Conditions of Entitlement concerning the Sales and Marketing of Fixed-Line Telecommunications Services

Since issuing the Notification to TalkTalk on 19 May 2011, Ofcom has closely monitored the steps TalkTalk has taken to comply with the requirements of the Notification and the effect these actions have had in bringing Talk Talk into compliance with GC24.

Having carefully considered TalkTalk's representations, Ofcom considers that further enforcement action is not required and on that basis is closing this case. TalkTalk's compliance with GC24 will continue to be monitored as part of Ofcom's industry-wide monitoring and enforcement programme into GC24.

Update note: 8 July 2011

Following receipt of the Notification, TTG made representations to Ofcom on 20 June detailing the steps it has taken to comply with the requirements of GC24. These steps are comprehensive and include:

  • changes to its sales and marketing practices,
  • changes to its cancellation practices, and
  • changes to its cancellation systems and processes.

In addition, TTG made representations on the steps it has taken to remedy fully the consequences arising from its contraventions. This included identifying and compensating affected customers, specifically those customers who had not already had their complaint resolved by TTG.

Ofcom will now monitor TTG to ensure that the steps outlined to Ofcom lead to full compliance with GC24.

A non-confidential version of the Notification issued to TTG on 19 May 2011 has now been prepared and can be found at the link below.

End of update note

Ofcom has concluded its investigation into TTG and has determined that there are reasonable grounds for believing that that since July 2010 to date, TTG has contravened, and is contravening, GC24.
Specifically, TTG has contravened and is contravening the mis-selling prohibition under GC24.3 by engaging in dishonest, misleading or deceptive conduct by providing misleading information that is likely to affect a Customers purchasing decision; and engaging in Slamming.

In addition, TTG has contravened and is contravening GC24.9 and GC24.10 concerning Customers termination rights by not allowing Customers to terminate the contract from the point of sale to the completion of the Transfer Period, without charge; and not allowing Customers to exercise their right to terminate the contract from the point of sale to the completion of the Transfer Period without unreasonable effort.

Ofcom did not find evidence of contravention of GC24.6 during its investigation.

On 19 May 2011, Ofcom issued a Notification to TTG under section 94 of the Communications Act 2003 (the Notification) regarding past and ongoing contravention of GC24. TTG has until 20 June 2011 to make representations to Ofcom about the matters covered by the Notification during the period 1 July 2010 to the date the Notification was issued (19 May 2011).

Ofcom expects that the steps TTG can take to comply with the requirements of GC24 may include, but are not limited to:

i) ensuring that, during its sales and marketing activities with Customers or prospective Customers, TTGs representatives provide only factual and accurate information about the contractual process. This means clearly explaining to Customers that they are about to enter into a contract with TTG.

ii) ensuring that TTG systems are technically capable of correctly cancelling Customer orders within the Transfer Period when Customers request this and ensuring that TTGs cancellation team agents understand how to use these systems correctly. In addition, ensuring that there are appropriate systems in place to follow up requests to cancel, without further request from the Customer, where technical or other issues have prevented cancellation at the time of the request;

iii) ensuring that Customers are able to cancel within the Transfer Period, i.e. the full 10 working days (14 calendar days) cooling-off period. This may require TTG to set up a specific quality assurance process to monitor when transfer orders are put through in order to ensure that Customers are able to cancel up to and including day 14 of the Transfer Period; and

iv) ensuring Customers are able to cancel without unreasonable effort. This may require cancellations team agents to be re-trained as to what is acceptable behaviour when attempting to retain Customers who wish to cancel. For example, agents must not behave in an aggressive manner including applying unacceptable pressure on a Customer to continue with a contract. Agents must also allow Customers to cancel their contracts without having to request this multiple times. This may also require a specific quality assurance process to be set up to monitor the behaviour and compliance of the cancellation team agents, as well as looking at the retentions bonus scheme.

Additionally, the steps TTG can take to remedy fully any consequences arising from its contraventions may include, but are not limited to:

i) allowing Customers who believe they have been mis-sold to cease their contract with TTG, regardless of the length of contract served, with no requirement to pay an Early Termination Charge or disconnection fee and no requirement to pay any charges for services other than those the Customer has used. Where the Customer chooses to return to their previous supplier, this would include compensation for any charges the Customer may incur in the process of returning to their previous supplier;

ii) allowing Customers who wished to cancel within the 14 day cooling-off period but were not able to do so, to return to their previous CP, should they so wish, without charge. This would include compensation for any charges the Customers may incur in the process of returning to their previous supplier;

iii) allowing Customers who had been told by TTG that their order had been cancelled, but who subsequently were transferred to TTG, to return to their previous CP, should they so wish, without charge. This would include compensation for any charges the Customers may incur in the process of returning to their previous supplier;

iv) where Customers who may otherwise have fallen into the above categories but who have already returned to their previous supplier, and have incurred charges in doing so, TTG should compensate them for those charges.

Where a Customer believes they have been mis-sold and TTG do not agree, TTG should follow its Customer Complaints Code and provide a Deadlock Letter to the Customer to allow the Alternative Dispute Resolution (ADR) process to take effect. If the Ombudsman decides that the Customer has been mis-sold, then TTG must comply with the above remedies.

Alternatively, TTG may, prior to the Deadline of 20 June 2011, make representations to Ofcom about how it proposes to remedy the consequences arising from its contravention of GC24 by a specified date to be agreed with Ofcom. Ofcom is not bound to accept any proposal by TTG.

We will now monitor TTGs compliance with the Notification.

A non-confidential version of the Notification is currently being prepared and will be published shortly.

Text published when case was opened

Ofcom has opened this investigation following complaints from consumers who claim to have been mis-sold a fixed-line telephone service by TTG or have had their service switched to TTG without their consent.

Ofcoms investigation will examine whether there are reasonable grounds for believing that TTG has failed to comply with the requirements of GC24 concerning the mis-selling prohibition (GC24.3) and information provided at point of sale (GC24.6). The investigation will also look at TTGs compliance with other sections of GC24 as appropriate.

Case Leader: Sue Merrifield (email: sue.merrifield@ofcom.org.uk)
Case Reference: CW/01059/11/10