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Own-initiative investigation into True Telecom's compliance with GC22, GC9 and relevant consumer protection legislation

20 Hydref 2016

Complainant: Ofcom own-initiative investigation.
Investigation against: True Telecom Limited (trading as True Telecom).
Case opened: 20 October 2016 
Investigation closed: 16 November 2017 
Issue: Whether True Telecom has complied with its obligations under General Condition 22, General Condition 9 and relevant consumer protection legislation.
Relevant Instrument: Including, but not limited, to General Condition 22, General Condition 9, Part 8 Enterprise Act 2002 (“EA02”) and the Consumer Protection from Unfair Trading Regulations 2008 ("CPRs") .

Update note: 26 March 2018

Ofcom is today closing its investigation into True Telecom after a period of compliance monitoring. True Telecom entered into administration on 27 October 2017 and on 2 February 2018 it was confirmed that Onecom had purchased the True Telecom customer base. On the basis that True Telecom no longer exists as a communications provider, Ofcom has decided to formally close its investigation.

End of update note

Update note: 19 December 2017

Ofcom has today published a non-confidential version of the Confirmation Decision issued to True Telecom on 16 November 2017. It can be found under related content.

Update note: 17 November 2017

Ofcom has issued a Confirmation Decision (‘the Confirmation Decision’) under Section 96C of the Act to True Telecom, imposing a penalty of £300,000 in relation to the Ofcom own-initiative investigation into True Telecom’s compliance with GC22.3(d), GC22.8 and GC9.4.

On 1 August 2017, Ofcom provisionally determined that there were reasonable grounds to believe that True Telecom had contravened GC22.3(d), GC22.8 and GC9.4 between 8 October 2015 and 26 October 2016. Ofcom therefore issued True Telecom with a notification under Section 96A of the the Act (‘the Section 96A Notification’).

True Telecom provided written and oral representations on the issues set out in the Section 96A Notification. Having considered those representations, Ofcom is satisfied that, between 8 October 2015 and 26 October 2016, True Telecom contravened GCs 22.3(d), GC22.8 and GC9.4, by:

  • engaging in Slamming. In particular, that it contacted Customers and then placed transfer orders without the Customers’ authorisation and, that it placed repeat transfer orders following the cancellation of the initial transfer order by the losing CP, without making contact with the Customers to obtain their authorisation to place a new transfer order;
  • failing to create and retain relevant records of consent, for each contract entered into for the provision of Communications Services, for the required minimum period of not less than twelve months; and
  • entering Consumers into contracts that exceeded 24 months and including terms requiring them to pay early termination charges (‘ETCs’) for the period following the initial commitment period.

Therefore, Ofcom has now issued True Telecom with a Confirmation Decision under Section 96C of the Act.

As well as imposing a financial penalty on True Telecom, the Confirmation Decision also confirms the steps that True Telecom must take to comply with the requirements of GC22.3(d), GC22.8 and GC9.4  and to remedy the consequences arising from its contravention.

In particular, to the extent it has not already done so, the steps which Ofcom confirms must be taken by True Telecom to comply with the requirements of GC22.3(d), GC22.8 and GC9.4, are:

  • to make all necessary changes to its policies and procedures to ensure that:

(i) True Telecom is only placing transfer orders where the Customer has express knowledge and/or has given their express consent to a transfer order being placed;

(ii) True Telecom is creating and retaining Records of Consent for the required minimum period of 12 months; and

(iii) True Telecom is not entering Consumers into contracts containing provisions which require payment of compensation for a period exceeding 24 months.

  • to create and implement policies and procedures in relation to ensuring compliance with GC22.3(d), GC22.8 and GC9.4, including an effective quality assurance process to monitor the compliance by True Telecom’s agents who are placing transfer orders for Fixed-Line Telecommunications Services; and
  • to provide appropriate training to all True Telecom’s agents who are engaged in placing transfer orders for all True Telecom’s Fixed-Line Telecommunications Services in order to ensure compliance with GC22.3(d), GC22.8 and GC9.4.

True Telecom must also take the following steps, to the extent it has not already taken them, to remedy the consequences of the contraventions:

  • allow Customers who believe they were slammed by True Telecom to cease their contract with True Telecom, regardless of the period for which the contract has been in force, with no requirement to pay an ETC or disconnection fee and no requirement to pay any charges (including charges for transferring away from True Telecom) for services other than those the Customer has used;
  • for any Customers who believe they were slammed by True Telecom but who have already transferred away from True Telecom and have incurred charges in doing so, compensate them in full for those charges;
  • for identified Customers, that are still with True Telecom, take active steps to inform them of their right to terminate their contract with no payment of an ETC or disconnection fee;
  • for identified Customers, refund, in full, any money paid by those Customers to True Telecom. True Telecom must also refund the Customers, in full, for any other costs which may have been incurred as a result of being slammed, including payment of ETCs to their previous CP or the loss of upfront line rental which was paid to their previous CP;
  • for identified Customers, take active steps to inform them of their right to terminate their contract with no payment of an ETC or disconnection fee after a period of 24 months has elapsed from the date of entering into a contract with True Telecom; and
  • for identified Customers, who have already transferred to another CP and have paid an ETC to True Telecom, refund them for the portion of the ETC which relates to any period beyond 24 months.

True Telecom must comply with the requirements imposed on it by the Confirmation Decision as soon as possible and, in any event, not later than three months from the date of the Confirmation Decision. Ofcom will monitor True Telecom’s compliance with the requirements of the Confirmation Decision in Compliance Phase.

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

End of update note

Update note: 1 August 2017

Following an investigation, Ofcom has determined that there are reasonable grounds for believing that True Telecom contravened GC22.3(d), GC22.8 and GC9.4 of the General Conditions between 8 October 2015 and 26 October 2016. Ofcom has therefore issued a Notification to True Telecom under section 96A of the Communications Act 2003 (the “Act”).

Specifically, Ofcom has reasonable grounds to believe that True Telecom:

  • contravened GC22.3(d) by engaging in Slamming. In particular, that it contacted Customers and then placed transfer orders without the Customers’ authorisation and, that it placed repeat transfer orders following the cancellation of the initial transfer order by the losing CP, without making contact with the Customers to obtain their authorisation to place a new transfer order.
  • contravened GC22.8 by failing to create and retain relevant records of consent, for each contract entered into for the provision of Communications Services, for the required minimum period of not less than twelve months.
  • contravened GC9.4 by entering Consumers into contracts that exceeded 24 months and including terms requiring them to pay early termination charges for the period following the initial commitment period.

True Telecom 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 into True Telecom's compliance with General Condition 22 (GC22), General Condition 9 (GC9) and relevant consumer protection legislation following complaints received from consumers.

GC22 covers migrations of Communications Services within the Openreach and KCOM Access Networks. This condition includes provisions that protect consumers from harmful sales and marketing practices, ensures essential information about a contract is provided at the point of sale, and safeguards consumers’ basic cancellation rights.

GC9 covers rules relating to contracts in respect of the provision of information, the length of contracts and the conditions for termination.

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 True Telecom has failed to comply with these obligations since 1 October 2015.

Case Leader: Geoff Brown (email:geoff.brown@ofcom.org.uk)
Case Reference: CW/01189/10/16