Own-initiative investigation into Vodafone Limited ("Vodafone") in respect of compliance with General Condition 11 – Metering and Billing, General Condition 23 – Sales and Marketing of Mobile Telephony Services and consumer protection legislation

09 November 2016

Complainant: Ofcom own-initiative investigation
Investigation against: Vodafone Limited (trading as Vodafone)
Case opened: 12 June 2015
Case closed: 26 October 2016
Issue: Whether Vodafone has complied with its obligations under General Condition 11, General Condition 23 and relevant consumer protection legislation.
Relevant Instrument: Including, but not limited to, General Condition 11 (specifically 11.1) and General Condition 23 (specifically 23.2(a)), Part 8 Enterprise Act 2002 (“EA02”) and the Consumer Protection from Unfair Trading Regulations 2008 ("CPRs").

Update note: 9 November 2016

The Confirmation Decision issued to Vodafone Limited on 25 October 2016 can now be found under related content.

End of update note

Following our investigation, Ofcom decided to issue Vodafone with a notification under s96A of the Communications Act 2003 (the “Act”) on 15 April 2016 as we had reasonable grounds to believe that it had contravened GCs 23.2(a) and 11.1 of the General Conditions at times between 26 May 2011 and 28 September 2015.

Vodafone provided written representations to Ofcom on 1 July 2016 in relation to the matters set out in the s96A notification.  Ofcom and Vodafone entered into settlement discussions on these matters and on 24 October 2016 Vodafone wrote to Ofcom admitting its liability in relation to the nature, scope and duration of the contraventions.

Having considered Vodafone’s representations and admissions, Ofcom is satisfied that, between December 2013 and April 2015, Vodafone breached GCs 23.2(a) and 11.1 in the following ways:

  1. In relation to GC23.2(a) by its conduct when selling Mobile Telephony Services. It gave 10,452 of its customers incorrect information that, when they purchased Top-Ups for its PAYG Mobile Telephony Services via E Top-Up methods (at ATMs, by direct debit, E-pack purchase, E-Top-Up (Swipe cards) and Mobile ATM Top-Ups), they would receive those services in return; and
  2. In relation to GC11.1 by rendering Bills to End-Users in respect of the provision of Public Electronic Communications Services in which the account balance information did not accurately reflect the true extent of the credit for which they had paid and the services that Vodafone had provided to them.

Therefore, on 25 October 2016, Ofcom issued Vodafone with a Confirmation Decision under section 96C of the Act.

The Confirmation Decision imposes a financial penalty of £3,700,000 on Vodafone in respect of its contraventions of GCs 23.2(a) and 11.1 between December 2013 and April 2015. The penalty includes a discount that reflects Vodafone’s co-operation in settling this matter.

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

Update note: 20 April 2016

Following an investigation, Ofcom has determined that there are reasonable grounds for believing that Vodafone contravened GCs 23.2(a) and 11.1 of the General Conditions at times between 26 May 2011 and 28 September 2015. Ofcom has therefore issued a Notification to Vodafone under section 96A of the Communications Act 2003.

Specifically, Ofcom has reasonable grounds to believe that Vodafone engaged in conduct contrary to the relevant conditions when selling pre-paid mobile telephony (PAYG) services to its PAYG customers and rendering bills to such customers that did not represent the true extent of the service actually provided to them.

The scope of the Investigation was revised during its course. In particular, Ofcom discontinued the investigation of possible contraventions of general consumer protection legislation (under the CPRs and Part 8 EA02). Ofcom makes no findings in these regards.

Vodafone now has an opportunity to make representations to Ofcom on the matters contained in the Notification before Ofcom makes a final decision in accordance with section 96C of the Act

End of update note

Ofcom has opened this investigation in light of evidence submitted by Vodafone in the course of Ofcom’s enquiries.

Our investigation focuses on Vodafone’s alleged sale of Pay As You Go services to a group of customers who were not provided with such services.

General Condition 11 (GC11) places requirements on communication providers (“CPs”) in relation to metering and billing. GC11.1 requires that a CP shall not render any Bill to an End-User in respect of the provision of any Public Electronic Communications Services unless every amount stated in that Bill represents and does not exceed the true extent of any such service actually provided to the End-User in question.

General Condition 23 (GC23) places obligations on mobile CPs regarding the ways in which they engage in sales and marketing activity of mobile telephony services. GC23.2(a) prohibits mobile CPs from engaging in dishonest, misleading or deceptive conduct when selling or marketing such services.

The CPRs prohibit misleading actions and omissions and generally unfair commercial practices. Ofcom has powers to take action in respect of these prohibitions under Part 8 EA02.

Ofcom’s investigation will examine whether there are reasonable grounds for believing that Vodafone has failed to comply with the obligations and relevant consumer protection legislation.

Case Leader: Rachel Bennett (email: rachel.bennett@ofcom.org.uk)
Case Reference: CW/01160/06/15