Ofcom own-initiative investigation into Plus Save LTD’s compliance with consumer protection legislation and General Conditions under the Communications Act 2003

19 April 2010

Complainant: Ofcom own-initiative investigation
Investigation against: Plus Save LTD ("Plus Save")
Case opened: 17 December 2010
Case closed: 18 May 2011
Issue: Whether Plus Save has breached any relevant consumer protection legislation and/or has failed to comply with its obligations under General Conditions 10 ("GC10"), 14 ("GC14") and 24 ("GC24") of the General Conditions of Entitlement.
Relevant instrument: Including, but not limited to, Part 8 of the Enterprise Act 2002, the Consumer Protection from Unfair Trading Regulations 2008 ("CPRs") and General Conditions 10, 14 and 24 of the General Conditions of Entitlement.

Ofcom opened this investigation into Plus Save to assess whether it had breached any relevant consumer protection legislation and/or had failed to comply with its obligations under specific General Conditions of the General Conditions of Entitlement.

Ofcom is aware that earlier this year, Plus Saves wholesale provider terminated the services that it was providing to Plus Save, due to contractual issues. Customers of Plus Save had the opportunity to move away to an alternative provider, and those that failed to do so, had their lines ceased at the end of March 2011 (see updates below). As far as Ofcom is aware, Plus Save does not have any remaining customers, and it is not actively selling telephony services to new customers. On this basis, Ofcom has now closed this investigation.

Ofcom will however continue to monitor this company closely through its fixed-line mis-selling programme. Should it become apparent that the company is actively trading and acquiring new customers, and should we receive complaints from consumers, then we will not hesitate to consider reopening the investigation.

Advice for consumers:
We are aware that some consumers have contacted Ofcom about being pursued for payment of bills. Ofcom is able to offer the following guidance:

  • If you have consented to a Direct Debit being set up and have had incorrect Direct Debit amounts taken out of your account i.e. duplicate bills or incorrect amounts debited, you should attempt to contact Continental Telecom and also contact your bank or building society as you will be protected by the Direct Debit guarantee which provides as follows:
  • if there is a change in the amount to be paid or the payment date, the person receiving the payment (the originator) must notify the customer in advance.
  • if the originator or the bank/building society makes an error, the customer is guaranteed a full and immediate refund of the amount paid.
  • customers can cancel a direct debit at any time by writing to their bank or building society. (-1-)
  • If you believe that you have been affected by an action that you consider to be unlawful then this is likely to be outside of Ofcoms remit and it would be appropriate to contact the police. An example of an activity that may be unlawful would be where monies have been taken out of your account without consent.
  • Even where you do consider it appropriate to go to the police, if the matter relates to a loss of money from your bank account, you should also contact your bank or building society to make them fully aware of the situation as they will be able to advise you on whether and how you can recover such payments.

Update note 17 March 2011

Following the update below published on 16 February 2011, O-bit Telecom has now confirmed that all remaining lines, where customers of Plus Save Ltd have not placed an order with an alternative provider, will be ceased by 31 March 2011.

Ofcom has been made aware that a small number of customers have not responded to communication made by O-bit and BT Retail. Initially, these customers telephone lines will be suspended between 21 and 31 March 2011. During this period, customers will still be able to place an order to transfer their lines to another provider. However, they will be unable to make outbound calls (except for calls to emergency services) or receive incoming calls. Following the suspension, all remaining lines will then be ceased on 31 March 2011. During the suspension period, affected customers will be able to change the service so that only outbound calls are barred by calling 08008495001.

Ofcom continues to urge customers of Continental Telecom and/or Plus Save, who have received notification from O-bit that they are affected, to find an alternative supplier, and place an order as soon as possible.

Ofcom has also been informed that a small number of customers of Continental Telecom had their lines provided through a different wholesale provider, and due to another contractual dispute, these were ceased on or around 11 March 2011. These customers will now have lost service, but O-bit will not able to assist these customers. However, customers who have already lost services can place an order with an alternative provider.

End of update note

Update note: 16 February 2011

Ofcom has been informed by O-bit Telecom Limited (O-bit), which provides wholesale services to Plus Save Limited (Plus Save) that, due to contractual issues, it will be terminating services to Plus Save.

Ofcom understands that a number of Plus Saves customers had their service transferred from Continental Telecom from September 2010. Customers may not have realised that they have been moved to Plus Save. We do not have any specific information on this migration, but are currently looking into this as part of our investigation into Plus Save.

Should O-bit terminate Plus Saves wholesale services, this will result in all Plus Save customers losing service, unless they transfer their telephone services to an alternative provider. If they have broadband with another provider this may also be affected.

O-bit has been advising customers (through a letter sent on 13 January 2011) that they could either transfer their services to O-bit, or to another provider of their choice, to avoid their service being ceased. In addition, BT Retail has been contacting customers, giving them the option to place an order with BT or another provider of their choice, as customers are at risk of having their services ceased.

We therefore strongly advise customers of Continental Telecom and/or Plus Save, who have received notification from O-bit that they are affected, to find an alternative supplier, if they have not already done so, and place an order as soon as possible. Customers who fail to respond are likely to have their phone line disconnected, will lose service, and may have to pay a reconnection fee to set up any future service. As soon as we know the date when services will cease, we will update this bulletin.

Ofcom understands that a small number of lines for Continental Telecom customers are provided through a different wholesale provider. If you are in any doubt as to whether you, as a customer of Continental Telecom, are affected you should call O-bit on 08008495001 to confirm the status of your line.

Ofcom is continuing to monitor both Continental Telecom and Plus Save in relation to its ongoing cases against them.

End of update note

Following Ofcom's own-initiative investigation into Continental Telecom, which is currently ongoing and being monitored for compliance, Ofcom has become aware of a new company, Plus Save, that may have acquired some of Continental Telecoms customer base. The investigation will look into whether Plus Save is operating in accordance with General Conditions, specifically:

GC10, which requires that communications providers ("CPs") ensure that clear and up to date information on its applicable prices and tariffs and on its standard terms and conditions, in respect of access to and use of Publicly Available Telephone Services by end-users is published in accordance with the General Condition. Published information should at least include (the list is not limited to) the CPs name and major office address and the standard contract conditions offered, including any relevant minimum contractual period. This investigation will examine whether there are reasonable grounds for believing that Continental Telecom has failed to comply with GC10 with regards to transparency and publication of information;

GC14.1, which required CPs to produce a basic Code of Practice for its Domestic and Small Business Customers which should set out at least where customers may avail themselves of the information which is required to be published under GC10.

GC14.5, which requires that communications providers shall implement and comply with a Dispute Resolution Scheme (such as Otelo or CISAS), including any final decision of the Dispute Resolution Body made in accordance with that Scheme, for the resolution of disputes between the CPs and its Domestic and Small Business Customers in relation to the provision of Public Electronic Communications Services; and
GC24 which relates to the Sales and Marketing of fixed-line telecommunications services. GC24.3 prohibits inappropriate sales activity, which includes a general prohibition that the CP must not engage in slamming. In addition, GC24.5 requires CPs to publish a copy of GC24 or a link to it (as published on Ofcoms website) in an easily accessible and reasonably prominent manner on its website. Where there is no website, it should be made available in its registered office during normal office hours for inspection free of charge by members of the general public.

The investigation will examine whether there are reasonable grounds for believing that Plus Save has failed to comply with these General Conditions, and specifically in relation to GC24, in relation to the way in which it has acquired its customer base and the relationship, if any, between Plus Save and Continental Telecom.

Additionally, the investigation will consider whether Plus Save has breached any relevant consumer protection legislation, as set out in the relevant instrument section at the top of this bulletin entry.

If you are a consumer and wish to discuss this case please contact Ofcom's Advisory Team on 020 7981 3040 or 0300 123 3333.

Case Leader: Rapinder Newton (email: rapinder.newton@ofcom.org.uk)
Case Reference: CW/01063/12/10

Footnotes:

1.-This information is from the website of the Financial Ombudsman Service (the official independent expert in settling complaints between consumers and banks etc) - http://www.financial-ombudsman.org.uk/publications/ombudsman-news/27/27-directdebit-guarantee.htm