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Vodafone fined £4.6m for breaches of consumer protection laws

The most complained about telecoms provider Vodafone has been fined £4.6m by Ofcom for “serious and sustained breaches of consumer protection rules”.

Ofcom undertook two investigations lasting 18 months. The first was started on June 15th 2015. Following its investigation, Ofcom decided to issue Vodafone with a notification under s96A of the Communications Act 2003 (the “Act”) on 15 April 2016 as they had reasonable grounds to believe that it had contravened consumer law between 26 May 2011 and 28 September 2015.

Vodafone provided written representations to Ofcom on 1 July 2016. Ofcom and Vodafone entered into settlement discussions and on 24 October 2016 Vodafone wrote to Ofcom admitting its liability in relation to the nature, scope and duration of the contraventions.

In a second investigation, Ofcom were found not to have procedures, effective to “ensure” the fair and timely resolution of complaints, to clearly established timeframes; and not securing, a Written Notification (details of a dispute resolution scheme) was sent to customers if a Complaint remained unresolved after 8 weeks and no relevant exceptions applied. The investigation took place between 1 January 2014 and 5 November 2015 and Vodafone were fined £925,000.

As a result of these failings, two penalties have today been imposed against Vodafone: £3,700,000 for taking pay-as-you-go customers’ money without providing a service in return; and £925,000 for the flaws in its complaints handling processes.

The penalties incorporate a 7.5% reduction to reflect Vodafone’s agreement to enter into a formal settlement, which will save public money and resources. As part of this agreement, Vodafone admits the breaches. It has also reimbursed all customers who faced financial loss, but for 30 it could not identify, it made a donation of £100,000 to charity.

The money, which must be paid to Ofcom within 20 working days, will be passed on to HM Treasury.

The substantial fine sends out a message to telecoms companies that these breaches in consumer law, not ensuring adequate staff training and treating customers badly will not be tolerated. Telecoms companies need to up their game instead of continuing to be the bottom of the pile when it comes to customer service.

Marcus Williamson, editor of the website CEOemail.com which provides the email addresses for any CEO, has seen a rise over the last few years of people searching for telecoms CEOs. He says “I’ve seen a steady increase in people seeking to complain to the CEO of Vodafone when customer services has failed them. As a communications company they must work to improve their own customer communications, which are frequently unclear and confusing.“

So what do you do if you need to complain about a telecoms provider?

  • Keep evidence and write wherever possible. Laws around recording calls are unclear and complicated so you may not be able to use them in court should you need to do so
  • Refer to the correct consumer law. (Consumer Rights Act 2015 states that you are entitled to services to be carried out with reasonable skill and care. Consumer Protection from Unfair Trading Regulations 2008 covers mis-selling)
  • Ensure you set a deadline for response and tell them what you will do if not satisfied
  • Write to the CEO, who is unlikely to respond in person but the complaint will be escalated
  • Ask for a deadlock letter. If the complaint is still not resolved then take the complaint to either of the Telecoms Ombudsmen: CISAS or Ombudsman Services

lap top on woman's knees phone in one handAll you need to know about complaining to telecom providers everything you need to know about laws etc when complaining.

 

 

 

 

 

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Vodafone were in the news earlier in the year:

Vodafone incorrect billing your rights discussed on Moneybox

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The Ombudsman Omnishambles continues… Even on Conflict Resolution Day…

Today (20th October)  is Conflict Resolution Day. Created in 2005 by the Association for Conflict Resolution1. It is now an annual celebration aimed at increasing awareness of the various peaceful, non-violent methods of dispute resolution (ADR) available to traders and consumers.

Lots of people text Ombudsman omnishambles
How are authorities failing in their approval of ombudsmen and ADR providers? Many ways

 

Helen Dewdney, The Complaining Cow blogger and author of How to Complain: The Essential Guide to Getting Refunds, Redress and Results! recommends ADR to consumers as a cost effective (usually free to consumer) and speedier process than going to court. She expresses concern over the current landscape though saying that many people don’t know about ADR. “Frequently I hear from people who are at the end of their tether with traders and although may be aware of an ombudsman for regulated sectors such as Finance, Energy and Telecoms they are less aware of other sectors such as property, vehicles and furniture.”

For example, The Furniture Ombudsman now incorporating The Dispute Resolution Ombudsman was set up by the Office of Fair Trading and has 25 years of experience in the retail sector dealing with complaints around furniture, home improvement and general retail goods. The independent, thorough investigation process frequently involving expert reports ensures a fair resolution for both parties, that consumers can trust. Kevin Grix, CEO of The Furniture Ombudsman and The Dispute Resolution Ombudsman advises consumers to become more aware of ombudsman schemes and protect themselves more from the outset. “Before you shop, make sure your trader of choice offers ADR and if you find yourself in a dispute, you can ensure you contact the right ADR scheme for the trader you have a contract with.“

Ombudsmen use adjudication, which is usually free to the consumer, binding on the trader but not on the consumer should s/he not agree and want to take the matter to court. However, lesser known but an alternative to Ombudsmen is mediation which puts the parties within a dispute in control of the outcome, taking into account wishes and needs not just legal entitlement. Jo Holland, a mediator consultant with 10 years’ experience finds that people often want to be heard, say their piece or just hear an apology and says “Consumers and businesses need choice and access to affordable and speedy dispute resolution. Mediation provides imaginative, practical and financial outcomes without the need to go to Court”

However, an investigative report Ombudsman Omnishambles: Serious unresolved issues affecting the operation of the ombudsman ADR system in the UK2 written by Dewdney and Marcus Williamson identified a number of issues regarding the certification and ongoing monitoring of ADR providers. The organisations responsible for appointing and overseeing the ombudsmen appear to be taking a “light touch” approach to the new privatised ombudsman sector.

Among the findings of the report:

* The Chartered Trading Standards Institute (CTSI) does not carry out basic “fit and proper” person tests before approving ombudsmen, their staff and contractors.

* One ombudsman is breaching Ombudsman Association rules on independence, openness & transparency. In particular, the company is running an “accredited retailer” programme in parallel with having the ombudsman role confusing consumers.

The use of ADR has the potential to offer consumers effective means of redress and the expansion into other sectors is welcomed but key issues must be resolved before bringing the whole sector into disrepute and lose confidence of consumers.

Presentation at the Westminster Business Forum seminar Next steps for consumer protection in the UK – dispute processes, enforcement and the consumer markets green paper. 15/11/18 Alternative Dispute Resolution – approval and oversight in the loosest possible sense of the words…

How approval bodies are failing to properly approve and monitor Alternative Dispute Resolution -