Caudwell pays £150,000 in mis-selling row

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Caudwell, the independent telecoms group, has paid £150,000 to BT in an out-of-court settlement after a dispute over mis-selling of domestic phone services. Yesterday, the company said it had put procedures in place to prevent sales staff repeating the tactics that led to the dispute.

The Caudwell Group includes the mobile phone retailer Phones 4U and the fixed line operation Caudwell Communications.

A spokesman for the group, which is almost entirely owned by the tycoon John Caudwell and his brother Brian, described rumours that the two were planning an outright sale of the business this autumn as "pure speculation".

Caudwell's dispute with BT concerned the increasingly competitive market for domestic telephone services. Earlier this year, BT launched High Court action after complaints that staff at one of Caudwell's call centres had been misleading customers. The sales staff, who were attempting to recruit BT customers for Caudwell's fixed-line services, were accused of passing themselves off as BT employees.

Tim Whiting, group managing director for the Caudwell Group, said an investigation had shown that third-party operators acting on behalf of Caudwell had not followed its guidelines. "Once we were fully aware of these issues, the business moved swiftly to remove the third-party suppliers from the supply chain and to correct any wrong-doing to the small number of customers affected," he said. "We are pleased to have worked with BT to resolve the situation without the need of court intervention." He said the payment made to BT reflected its legal costs.

Gavin Patterson, BT's consumer group managing director, said: "Generally, we are still concerned about the level of mis-selling in the telecommunications industry and we are prepared to take similar action against other communication providers, if they confuse customers in this way and cause damage to BT's brand."