Phone 'slamming' firms face crackdown

TELEPHONE companies that switch customers to a new service without their consent are being threatened with hefty fines.

Telecoms watchdog Ofcom is bringing into force measures aimed at clamping down on mis-selling of fixed telephone lines, including the practice of 'slamming' ? where a consumer is switched without consent or knowledge.

It usually occurs when a service provider cold calls a household offering cheaper calls than their existing provider. Even if the consumer only expresses interest in receiving more information, the telecoms company will automatically switch them to the new service.

Under new regulations, fixed-line service providers will have to draw up and comply with a new code of practice on sales and marketing. If a company persistently breaches the code, Ofcom will have the power to fine it up to 10% of its turnover.

The new rules come into effect in six weeks and will be in place for two years when it will be reviewed. Companies previously followed a voluntary code but Ofcom said the number of slamming complaints was rising.

The move follows heavy lobbying by BT, which has been the main victim of the practice. The company has about 70% of the home phones market but has come under intense pressure from new entrants fighting for market share.

BT has been building a body of evidence of customers that have been switched without permission. It has received reports of cases where people have been switched without even speaking to the other telephone company, while others have been switched when they only asked for more information.

BT Retail chief executive Ian Livingston said: 'There are hundreds of customers every day - up to 15,000 customers a month - who are upset about their transfer and our evidence suggests this problem is getting worse, not better.'

Ofcom chief executive Stephen Carter said: 'Effective competitive markets need well-informed customers making positive decisions to switch their business from one supplier to another.

'These measures should help support progress towards the appropriate levels of clarity and transparency whilst the market continues to mature.'

London-based recruitment consultant Louise Moore was a victim of slamming following a cold call from a telcoms company earlier this year. She agreed to receive more information from the company but was surprised when her current call provider, BT, contacted her to confirm she wished to close her account.

She said: 'I had simply agreed to look at more information because I was interested so I couldn't believe it when I was informed I was cancelling my arrangement with the existing provider. That was not what I agreed to.'