Unicom Fined £200,000 by Ofcom For Misleading Customers

Really pleased to hear that Ofcom have just announced they are fining Unicom for misleading small business over telecoms deals.

We have reproduced the full text of the result below. But in short if you signed a deal with Unicom between 1 March 2013 to 8 July 2014 you can get out for free with no penalties.

We hope this is just the start and Ofcom will look at other suppliers who have used dubious practices and strengthened the rules to benefits customers who have been the victim of misleading sales tactics

Ofcom fines Unicom for misleading customer

Package of measures brought against small business telecoms provider
Ofcom has today fined Universal Utilities Ltd, trading as Unicom, £200,000 for mis-selling landline telephone services.

The decision also requires Unicom to take a number of steps to help compensate customers affected by the mis-selling and to guard against it happening again.

Ofcom launched the investigation into Unicom, which provides telephone and broadband services to around 100,000 small businesses, after receiving complaints from customers and having assessed evidence submitted by Unicom in the course of initial enquiries.

The investigation into Unicom is part of Ofcom’s wider monitoring and enforcement programme into the sales and marketing activities of communications providers.
Under Ofcom rules, communications providers must give prospective customers accurate information about the services they are providing.

Ofcom’s investigation found that, over the period investigated – from 1 March 2013 to 8 July 2014 – Unicom used sales processes that gave some prospective business customers a misleading impression about costs they could face.

Specifically, this related to Unicom giving a misleading impression about the payment of early termination charges if the prospective customer chose to leave their existing communications provider.

Over the same period, Unicom’s sales processes also misled some prospective business customers that transferring their landline telephone service to Unicom would not affect their existing broadband services.

As a result, Unicom has been found in breach of Ofcom rules, which state that providers must not engage in misleading conduct.

Ensuring compliance 
Ofcom has imposed a fine of £200,000 against Unicom and outlined steps the company must now take. These include:

• Compensating any customers who were misled in the relevant ways during the period investigated;
• Allowing those customers to exit their contract with Unicom penalty-free;
• Covering the cost of any reconnection charges for those customers where they choose to return to their previous provider;
• Making all necessary changes to its policies, procedures and marketing and sales materials to ensure it complies with the rules; and
• Providing appropriate training to sales staff, and introducing a system to monitor the conduct and compliance of Unicom agents.

Claudio Pollack, Ofcom’s Consumer and Content Group Director, said: “Small businesses in the UK increasingly rely on high-quality communications services.

“Service interruptions and unexpected costs can cause a real concern for these customers. Ofcom does not accept misleading practices and we will take action against companies that break the rules.”

The £200,000 fine is payable to Ofcom and then passed on to HM Treasury. Unicom must pay it within 20 working days of receiving Ofcom’s decision.