Mercury’s implementation and compliance with a Dispute Resolution Scheme

02 May 2007

Complainant: Own-initiative investigation, following a complaint from a member of the public
Complaint against: Mercury Telecommunications Ltd (‘Mercury’)
Case opened: 26 October 2006
Case closed: 21 February 2007
Issue: Mercury’s compliance with the requirement to implement and comply with a Dispute Resolution Scheme
Relevant instrument: Condition 14.7 of the General Conditions of Entitlement

Update note – 2 May 2007

A non-confidential version of the notification issued to Mercury under Section 94 of the Communications Act 2003 on 21 February 2007 has now been prepared and can be found at the link below.

Since issuing the notification, Ofcom has received confirmation from Otelo that Mercury has now met its obligations with regard to the final decisions made by Otelo. Ofcom has also received confirmation from the Communications & Internet Services Adjudication Scheme (CISAS) that Mercury has been accepted as a member of that ADR scheme.

End of update note

Ofcom has completed its investigation into this case and issued a notification to Mercury under Section 94 of the Communications Act 2003.

Ofcom’s investigation found that there were reasonable grounds for believing that Mercury has contravened the regulatory rule requiring communications providers to be a member of a dispute resolution scheme (“ DRS ”) so that domestic and small business customers can benefit from the protection that free access to alternative dispute resolution (“ADR”) provides (General Condition 14.7).

Specifically, Mercury has failed to comply with the conditions of membership of the Office of the Telecommunications Ombudsman (“Otelo”), including final decisions made by Otelo in relation to complaints about telephony services supplied to its customers.

The Section 94 notification issued by Ofcom on 21 February 2007 requires Mercury to comply with the requirements of General Condition 14.7, and to remedy fully any consequences arising from its failure to comply with that General Condition.

Ofcom would expect that the steps Mercury takes may include, but are not limited to:

(a) Complying with Otelo’s rules of membership for the period 3 October 2005 to 15 December 2006 including:

(i) paying all case fees requested by Otelo for the resolution of disputes submitted to it under the terms of the Dispute Resolution Scheme; and

(ii) complying with all decisions made by the Ombudsman;

(b) Implementing and complying with the rules of membership and directions of a Dispute Resolution Scheme[(-1-)], including any final decision of the Dispute Resolution Body, for the period from 15 December 2006 ; (i.e. become a member of a dispute resolution body (“DRB”)).

(c) Writing, with the text of correspondence to be approved by Ofcom, to all Mercury customers and former customers (for those former customers who purchased services on or after 3 October 2005 ) explaining their right to complain about services provided by Mercury and the process for exercising that right;

(d) Withdrawing invoices issued to customers or former customers that seek to recover Otelo case fees paid or payable by Mercury and/or any amount representing Mercury’s costs in connection with or prior to the use by that customer or former customer of Otelo’s ADR (whether directly or in the form of an “administration” or other fee);

(e) Refunding any money to customers paid pursuant to any such invoice.

Mercury has until 22 March 2007 to comply with Ofcom’s notification, to remedy any consequences and to make representations to Ofcom.

If Mercury does not comply, Ofcom will consider whether further enforcement action, including imposing a fine, is appropriate.

A non-confidential version of the notification and the accompanying explanatory statement are currently being prepared and will be published shortly.

Text published when the case was opened

General Condition 14.7 requires communications providers to implement and comply with an Ofcom-approved independent dispute resolution scheme (“ADR Scheme”) for their domestic and small business customers, in relation to the provision of public electronic communications services.

When a dispute between a communications provider and a customer is investigated by an ADR Scheme, the ADR Scheme charges a case fee to the communications provider for the use of the ADR Scheme to resolve the dispute.

Ofcom has received a complaint from a member of the public that Mercury has issued an invoice to that customer to recover the case fee incurred as a result of the ADR procedure.

Ofcom has been in contact with Mercury on this issue and has decided to open an investigation to consider whether Mercury’s attempt to recover the case fee from the customer is consistent with General Condition 14.7.

Under section 94 of the Communications Act 2003 ("the Act"), Ofcom may issue a notification where it has reasonable grounds for believing there has been a contravention of a General Condition.

Further, under section 96 of the Act, Ofcom may impose a penalty of up to 10 per cent of turnover for failure to comply with such a notification within the time period specified.

Case Leader: Sue Merrifield ( e-mail:sue.merrifield@ofcom.org.uk)
Case Reference: CW/00930/10/06

Footnotes:

1.- There are two approved entities pursuant to the definition of Dispute Resolution Scheme in General Condition 14.8(f) – The Office of Telecommunications Ombudsman (“Otelo”) and the Communications and Internet Services Adjudication Scheme (“CISAS”).