Ofcom Cracks Down on Slamming

LONDON -- Ofcom today announced that rules protecting consumers from themis-selling of fixed-line voice call services will now also coverproviders that offer voice and broadband services using full Local LoopUnbundling (LLU) technology.

Mis-selling refers to inappropriate sales and marketing activitiesincluding 'slamming', where customers can be switched from one companyto another without their express knowledge and consent.

Since May 2005 a new General Condition of Entitlement (GC 14.5) hasrequired providers of fixed-line voice call services to establish, thencomply with, a code of practice for sales and marketing in accordancewith Ofcom's guidelines. These rules were originally introduced for atwo year period.

Since the regulations came into effect in 2005, Ofcom has openedinvestigations into eleven providers: Economy Calls, FreeCall, Lo-Rate,Orb Communications, Platinum Telecom, Post Office, Scottish and SouthernEnergy, Tesco, Unicom, Universal Telecom and XLN Telecom.

From January to March 2007 Ofcom alone received some 1,200 complaintsrelated to mis-selling. Therefore, following public consultation, Ofcomhas decided that these rules will continue to apply after May 2007.

Ofcom has also extended GC 14.5 to include sales and marketing of fullLLU services. LLU refers to telephone lines - running between homes orbusinesses and the local exchange - that are not connected by BT. Theprocess for switching to, from and between full LLU providers isidentical to that of fixed line voice call services.

Separately, Ofcom is carrying out a review of migrations, switching andmis-selling across all telecoms services, including broadband, mobileand cable. This will identify whether a common approach to switchingwould further increase consumer protection across all telecoms services.This work is due to be completed later this financial year.

Ed Richards, Chief Executive of Ofcom, commented "Mis-selling causesproblems for consumers."

"We want competition and choice to continue to grow, and we wantconsumers to benefit from these changes. Consumers need to be able toshop around with confidence. Extending these rules and our enforcementactivity will protect consumers from inappropriate sales and marketingtechniques."

Ofcom