Complaint from The Carphone Warehouse Group plc about BT’s compliance with General Condition 1.2 in relation to verification calls

11 December 2006

Complainant: The Carphone Warehouse plc (“The Carphone Warehouse”)
Complaint against: British Telecommunications plc (“BT”)
Case opened: 25 July 2006
Case closed: 24 November 2006
Issue: Whether BT, in making verification calls to its customers with regard to whose telephone line another Communications Provider has placed a Wholesale Line Rental (“WLR”) or Local Loop Unbundling (“LLU”) transfer order, is in breach of either General Condition 1.2 of the General Conditions of Entitlement and/or the Notification of Contravention of General Condition 1.2 under Section 94 of the Communications Act 2003 issued to BT on the 25 May 2005 (“WLR Notification”)
Relevant instrument: Potential breach of General Condition 1.2 of the General Conditions of Entitlement governing the use of certain information provided in the context of Network Access arrangements, and/or a potential non-compliance with the WLR Notification

Update note - 11 December 2006

The case closure decision is now available at the link below.

End of update note

Summary

Ofcom has closed its investigation into verification calls made by BT to retail customers during the Transfer Period (i.e. the 10 working day period during which a customer’s line is moved from one communications provider (the “losing” provider) to an alternative communications provider (the “gaining” provider) and during which the order for transfer can be cancelled without the customer being subject to any form of financial penalty).

As part of this investigation Ofcom has defined a Verification Call to be a call made by the “losing” provider during the Transfer Period and serves only two purposes: (a) it confirms or verifies that the customer has consented to a transfer of their line to another communications provider; and (b) relays the same information as that which is contained in the Notification of Transfer letter (that is, a letter sent by the “losing” provider to the customer which informs the customer in neutral terms of the transfer request, the products affected and any relevant contractual issues arising from the transfer).

In this investigation Ofcom has concluded that Verification Calls as defined do not, in principle, contravene General Condition 1.2. Based on the evidence obtained by Ofcom during the course of this investigation (which included a sample of 240 BT call recordings for 2005 and 2006, call scripts, briefing and training materials), Ofcom has found that the significant majority of sampled calls made by BT to its retail customers during the transfer period were Verification Calls.

However, Ofcom also found that a small number of the total sampled calls made by BT during the transfer period were not Verification Calls. Specifically, in a minority of the sampled calls made to business customers BT asked the customer why they were leaving BT. Ofcom does not consider that it is necessary to ask this question or obtain this type of information for the purpose of making a Verification Call. During the course of its investigation BT acknowledged that such a question falls outside the purpose for which a Verification Call is made, and confirmed to Ofcom that it had put in place the necessary measures to ensure that this question is not asked again during calls made to customers during the Transfer Period. On this basis, Ofcom has decided to take no further action in relation to this matter at this time.
In early 2007 Ofcom intends to discuss any implications arising from this investigation with industry, including how communications providers can demonstrate that calls made to their customers during the Transfer Period are Verification Calls and therefore permissible under General Condition 1.2.

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

Case Leader: Marvin Luttrell (e-mail: marvin.luttrell@ofcom.org.uk)
Case Reference: CW/00909/07/06

Text published when the case was opened

Complaint from The Carphone Warehouse Group plc about BT’s compliance with General Condition 1.2 in relation to verification calls

Complainant: The Carphone Warehouse plc (“The Carphone Warehouse”)
Complaint against: British Telecommunications plc (“BT”)
Case opened: 25 July 2006
Issue: Whether BT, in making verification calls to its customers with regard to whose telephone line another Communications Provider has placed a Wholesale Line Rental (“WLR”) or Local Loop Unbundling (“LLU”) transfer order, is in breach of either General Condition 1.2 of the General Conditions of Entitlement and/or the Notification of Contravention of General Condition 1.2 under Section 94 of the Communications Act 2003 issued to BT on the 25 May 2005 (“WLR Notification”)
Relevant instrument: Potential breach of General Condition 1.2 of the General Conditions of Entitlement governing the use of certain information provided in the context of Network Access arrangements, and/or a potential non-compliance with the WLR Notification

Ofcom has opened this case to investigate verification calls made by BT to certain of its retail customers.

A verification call is a call made to a customer whose telephone line is about to be transferred to an alternative Communications Provider. BT states that it makes such calls in order to verify that the customer is aware that an order has been placed to move their service from BT to an alternative Communications Provider.

Carphone Warehouse alleges that verification calls are unjustified in the context of General Condition 1.2 and that BT, in making verification calls, may be carrying out marketing activity towards customers who have opted to switch to alternative suppliers using the WLR or LLU products, in an attempt to persuade the customer not to transfer.

During this investigation Ofcom will assess whether BT, in making verification calls, is contravening General Condition 1.2 and/or the WLR Notification.

General Condition 1.2 requires that Communications Providers must only use information provided by another Communications Provider in the context of Network Access negotiations solely for the purpose for which it was supplied. General Condition 1.2 also requires that such information shall not be passed to any other party (for example any other department, subsidiary or partner) for whom it could provide a competitive advantage.

The WLR Notification requires that BT shall not use customer specific information acquired from another Communications Provider for the purposes of WLR marketing activity, during the period between the WLR order being placed and the actual transfer taking place, in an attempt to persuade that customer not to transfer.

Case Leader: Marvin Luttrell (e-mail: marvin.luttrell@ofcom.org.uk)
Case Reference: CW/00909/07/06