|Investigation into||Onestream Limited (Onestream)|
|Case opened||22 January 2019|
|Case closed||05 December 2019|
This investigation examined whether Onestream complied with its obligations under General Condition (‘GC’) C7.3(a) by ensuring that it did not engage in mis-selling and slamming.
We found that Onestream contravened GC C7.3(a) by placing transfer orders to switch customers home phone services without their permission and in doing so, it engaged in Slamming.
|Relevant legal provision(s)||
GC C7.3(a) and (b) (and General Condition 22 under the general conditions in force prior to 1 October 2018)
Following our investigation, Ofcom has today issued a Confirmation Decision to Onestream under s96C of the Communication Act 2003 (the “Act”) for contravening the rules set out under GC C7.3(a). Ofcom and Onestream entered into a settlement process and Onestream wrote to Ofcom 3 December 2019, admitting its liability in relation to the nature, scope and duration of the contravention.
In light of the evidence and Onestream’s admissions, Ofcom is satisfied that between 13 April 2018 and 25 January 2019 (the Relevant Period) Onestream contravened GC C7.3(a) for almost ten months by Slamming at least 118 customers, many of whom were elderly and/or vulnerable. It did this in the following ways:
GC C7.3(a) protects consumers from Slamming which is one of the most extreme forms of mis-selling. Failure to comply with these rules amounts to a serious contravention and can cause significant harm to consumers, including stress, anxiety, financial harm, as well as the time and effort that consumers spend trying to resolve the situation. In this particular case the harm was magnified because a significant proportion of the customers affected were elderly and/or vulnerable and because for at least 113 customers, Onestream made repeated and systematic attempts to switch their home phone services.
In light of the seriousness of this case, the Confirmation Decision imposes a financial penalty of £35,000 on Onestream in respect of its contravention of GC C7.3(a). The penalty also includes a 30% discount from the penalty that Ofcom would otherwise have imposed, on account of Onestream’s admissions of liability and its agreement to enter into a settlement.
In setting the penalty, we have had regard to our penalty guidelines. The penalty reflects a number of factors including the harm suffered by customers, the objective of deterrence as well as the seriousness of the contravention. We also took into account the recklessness with which Onestream acted by not having in place effective and compliant policies and procedures which led directly to the contravention.
We have also taken account of the fact that Onestream co-operated fully with the investigation and took proactive steps to remedy the consequences of the contravention. These steps included writing to all customers that were switched to Onestream as a result of a telesales call to inform them of their right to exit their contract without penalty at any time, regardless of whether they were the subject of this investigation. Onestream has also now ceased outbound voice sales.
In addition to the remedial steps that Onestream has proactively taken, it is now also required to proactively refund any money paid to it by any of the 118 customers we have identified as being Slammed and to inform any of those 118 customers that are still with it, of their right to exit their contract without penalty.
The penalty imposed on Onestream is near the maximum penalty we could impose, which is 10% of a company’s annual turnover. Had Onestream been a bigger company with a higher turnover, the penalty could have been set at a higher level. Penalties must act as effective deterrents to prevent further contraventions from companies like Onestream and other companies. It is important that CPs take compliance with their regulatory responsibilities seriously, monitoring relevant processes and policies appropriately to ensure that contraventions of the rules do not occur in the first instance. This also means that when things go wrong, they can act quickly and responsibly to stop the contraventions and to remedy any potential harm.
A non-confidential version of the Confirmation Decision is currently being prepared and will be published shortly.
Rapinder Newton (email: email@example.com)