Phone salesmen and the call you don't get to make
First they tangle you up in spiel, then they switch you to a new landline provider without your knowledge. Sam Dunn reports on the technique of 'slamming'
Sunday 24 July 2005
Think your consent is needed for decisions that affect your finances? Some phone companies don't. Ferocious competition between providers of cheap landline packages vying to sign up new customers has spawned a financial monster: "slamming".
A mix of underhand sales tactics and consumer confusion has led to thousands of people being signed up to a rival home- phone service without their permission.
They have been complaining en masse to their provider (usually BT) and the industry regulator, Ofcom, which is now promising to investigate individual allegations.
Last month, BT says it received 21,259 calls from customers - more than 700 a day - who were "angry" or "confused" about a switch. Between January and March, the company was fielding an average of 15,000 of these complaints each month.
Slamming has tended to be carried out by door-to-door salesmen and cold-calling teams working for telecoms companies. In particular, sales staff have offered seemingly innocuous information about a rival home-phone firm's services - no signature required - only for consumers to discover two unwelcome letters on their doormat days later.
While one is a cheery "Thanks for joining!" from their new landline pro-vider, the other is a "Sorry to hear you're off" letter from their old company.
Other popular slamming techniques have included staff making reassuring references to BT, so that customers were given the impression that their existing BT deal was being upgraded, when in fact they were being switched to a rival service. And another strategy has been to seek bank details for "verification" - and then set up a direct debit for a new deal.
BT, whose dominant share of the home-phone residential market has made it a target for rivals, began High Court proceedings against Caudwell Communications last month, alleging that Caudwell's staff had imitated the telecoms giant's own employees in a bid to win new customers. It is now trying to reach an agreement out of court.
Ofcom, itself receiving between 500 and 600 calls a month on the subject from consumers, has started to crack down.
To determine the scale of the problem, the regulator had earlier probed a litany of grievances from BT customers about slamming and mis-selling. And although its research suggested that only half of these complaints were genuine, it was enough.
"This is a very serious issue and more than justifies the action we have taken," says a spokesman.
This action is that all fixed-line telecoms pro- viders must now follow a code of practice for sales and marketing, under which customers are treated responsibly - with fairness and transparency.
Any allegations of slamming or mis-selling will now be investigated on a case-by-case basis. Companies that constantly breach the code face fines of up to 10 per cent of their turnover.
If, by May 2007, there have been signs of improvement, then the rules may be abolished.
However, Ofcom has its work cut out. Already, it is having to scrutinise scores of companies to check their compliance with its guidelines, and that's on top of examining new allegations of mis-selling.
The chaos in the UK's home-phone market - worth £4.3bn, according to recent industry estimates - is largely down to the regulatory shake-up that was designed to introduce competition and cheaper prices. Although BT still has the biggest share of the home-landline market (around 70 per cent in January this year),
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