Can you trust your mobile phone bills?

ONLY masochists, the friendless and the very strange like the idea of receiving bills. It is wholly dispiriting to discover that a utility company has become your most frequent correspondent, as the contents are almost invariably more ghastly than expected.

Most of us assume that this is through bad planning on our part or a Micawber-like approach to our finances that makes the monthly and quarterly deluge feel like something out of the X-Files. Somehow we pay up. Very largely we take the accuracy of those bills on trust.

But today, a disturbing investigation by Financial Mail suggests that not only is it becoming increasingly difficult for mere mortals to know whether bills are correct - what with all the bells and whistles of rebates for this and that, free allocations and punitive rates for breaching basic packages - but there is also a distinct possibility that the companies popping their bills through our front doors might equally be in the dark.

OpenAir, a small firm, but one with access to large amounts of billing data, has done what few private individuals can. It has subjected its phone bills to a painstaking computerised audit.

The company says its findings make uncomfortable reading for its phone supplier, mmO2. OpenAir has issued a writ and its claims will eventually be tested in court.

If, as OpenAir claims, mmO2's billing systems are found wanting, the ramifications for the mobile phone giant are immense. If it cannot get bills right, mmO2 could find itself having to compensate those it has wrongly billed - both business and private customers.

More alarmingly for the company, if it cannot guarantee the integrity of its billing system it could fall foul of the Bacs payment clearing system, which supervises and runs direct debits. Bacs demands that when bills are wrong, they should be corrected immediately. If billing systems are faulty, this is almost impossible.

The company argues that it is improving its billing systems. But the experience of former senior executives suggests mmO2 has form - its back office has always struggled to keep pace with the increasingly fancy packages of sliding charges and free minutes that its salesforce offers.

Two of my colleagues have recently received blatantly inaccurate bills from mmO2. One has been refunded. The other has so far had no response, as the mobile giant's customer service department was out of action on the two days she tried to pursue her query.

There is some light. The Communications Act now makes billing and metering audits compulsory. MmO2 has a certificate for most types of business. But both Ofcom, the regulator, and BABT, the authority that carries out the audits, are now investigating the issues raised.

Mobile phone companies are allowed mistakes on one in every 50,000 bills - compared with a three% margin for error permitted every time a petrol pump is used. Only if mmO2 breaches its limit will it be in trouble.

Deregulation has brought about competition in a host of domestic services. And as they said in America when phones giant AT&T was broken up into smaller telecommunications firms: 'If you can tell who is cheapest, there's no competition.'

Few would argue that increased competition among phone companies and utility suppliers has not been a good thing. But if charging systems are so complex that it is impossible to check your bill or for companies to guarantee that error rates will not soar, competition has a heavy price.

WHEN Cazenove, stockbroker to the Queen as well as half the FTSE 100 companies, appeared to be caught on the hop as principal adviser to Marks & Spencer as Philip Green pounced, there was chat that this blue- blooded group was distracted.

The things on its mind are now beginning-to crystallise. With a planned flotation at the fancy putative price of more than £1bn now out of the window, the former partnership was clearly touting itself as well as its clients around the marketplace.

Many have looked - and the dream ticket of a tie-up with Lazard's appears to have gone up in smoke with its boss Bruce Wasserstein's plans to float or sell the merchant bank. But two suitors remain in the frame: Lehman and JP Morgan.

Both are US behemoths. But Lehman wants to swallow Cazenove whole while JP Morgan plans an arm's length 'joint venture' that would give it access to Caz's glittering client list.

Preserving the Cazenove culture is the key. While senior folk wouldn't mind cashing in some of their chips, most are not in it totally for the money. Kudos counts. Victory resides with whichever suitor offers the neatest compromise between cash and culture - possibly with the added allure of being able to come up with a replacement for Caz's highly rated boss, David Mayhew.