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Lying to customers, Unicom? Cough up £200k, do not pass Go

Firm has to smarten up its act if it wants to avoid another Ofcom thrashing

It’s good to know that complaints to Ofcom produce action. A probe into broken promises and lies told by Unicom has seen the company fined £200,000 by the regulator.

It wasn’t just customer complaints which led to the action. An Ofcom initiative looked into Unicom's terms and conditions – most notably, that unwitting customers were signed up on three-year contracts, that the company told customers that they would not be liable for unpaid portions of existing contracts with the subscriber they were migrating from, and that they would have no interruption to their service.

In May, Ofcom came to a conclusion:

Following an investigation, Ofcom has determined that there are reasonable grounds for believing that Universal Utilities Ltd (trading as Unicom) has contravened GC24.3 of the General Conditions between 1 March 2013 and 8 July 2014. Ofcom has therefore issued a Notification to Unicom under section 96A of the Communications Act 2003. Specifically, Ofcom has reasonable grounds to believe that Unicom operated standard sales and marketing processes under which it provided prospective customers with misleading information about its fixed-line telecommunications services.

The scope of the Investigation was revised during its course as new information became available. In particular, Ofcom discontinued the investigation of possible contraventions of GC9.3, GC9.4 and GC24.6 following our analysis of information obtained from Unicom. Ofcom makes no findings in these regards.

Ofcom has now revealed how much falling foul of the regulator has cost Unicom:

Ofcom therefore issued Unicom with a Confirmation Decision under section 96C of the Act on July 29 2015. The Confirmation Decision confirms the imposition of a penalty on Unicom of £200,000 in respect of its contravention. It also confirms steps that Unicom must take to comply with the requirements of GC24.3(a) 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 Unicom to comply with the requirements of GC24.3(a) are:

  • a) making all necessary changes to its policies, procedures, marketing materials and sales scripts and/or guidance to sales staff
  • b) providing appropriate further training to sales staff
  • c) implementing an effective quality assurance process to monitor compliance by Unicom’s agents with the requirements of the relevant GCs

As to the steps Ofcom confirms must be taken by Unicom to remedy the consequences arising from its contravention of GC24.3(a), to the extent it has not already done so it must establish and effectively implement schemes for:

  • a) paying to all affected customers it is able to identify amounts by way of compensation for loss or damage suffered by them or in respect of annoyance, inconvenience or anxiety to which they have been put and/or by way of ex gratia payments
  • b) allowing any customers who were misled by Unicom to cease their contract with it, regardless of the length of contract served, with no requirement to pay an ETC or disconnection fee and no requirement to pay any charges for services other than those the customer has used (and where the customer chooses to return to their previous Communications Provider (“CP”), this would include compensation for any charges the customer may incur in the process of returning to that provider)
  • c) compensating customers who may otherwise have fallen into the above category but who have already returned to their previous CP and have incurred charges in doing so

Ofcom will now monitor Unicom to ensure that the steps outlined in the section 96C Confirmation Decision lead to full compliance with GC24.3(a) and that the appropriate remedial steps are taken.

The ruling should be another good shot across the bows for many telcos who think that when they tell disgruntled customers to speak to Ofcom, no more will happen. ®

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