Mobile firms face new fines for mis-selling

Mobile service providers could face fines under new rules designed to prevent mis-selling which come into force today.

Media regulator Ofcom said the rules prevent mobile service providers and those selling their products and services engaging in "dishonest, misleading or deceptive conduct".

The new rules include a requirement for mobile network operators to make sure the customer intends, and is authorised, to enter into a contract.

They will also have to ensure that the terms and conditions of cashback deals offered by their retailers are not unduly restrictive.

Ofcom said the rules were introduced after a significant increase in the number of complaints about cashback schemes and other forms of mis-selling in the mobile phone market.

The regulator said examples of mis-selling complaints from consumers included finding themselves signed up to a more expensive tariff than agreed at point of sale.

Other complaints included signing up to a service after being told coverage in their area is good but then finding that they have little or no reception.

A voluntary code to tackle mis-selling introduced in July 2007 failed to lead to an significant reduction in complaints, Ofcom said.

Providers found to be breaking the new mandatory rules could be fined up to 10 per cent of relevant turnover.