What? Ofcom has decided to not pursue any further enforcement action against Talk Talk Group Limited (“TTGL”) for breaches of General Condition 24 (i.e. the mis-selling rules).

So what? TTGL had received an Ofcom Notification in relation to sales and marketing practices and its cancellation practices and processes. The Notification, dealing with a period from 1 July 2010 to 19 May 2011, was issued on 19 May 2011 and TTGL provided its response on 20 May 2011. The response demonstrated that TTGL had taken the necessary steps to comply with General Condition 24 and Ofcom decided to close the case.

Sales and marketing

The Notification focused on misleading conduct, which is outlawed by General Condition 24.3(a). A key criticism was the description of the contract as an “enrolment process”.  A number of customers understood the term “enrolment process” only to relate to the provision of information by TTGL and did not understand that they had entered into a contract by agreeing to participate in the enrolment process.

In several instances, sales staff had clearly pointed out that the enrolment process would be a binding contract but had later failed to correct customers who had clearly misunderstood this point which was also seen as a breach of the General Condition.  Ofcom found this particularly problematic where sales staff talked about the opportunity for customers to “make up their mind” during the cooling-off period.

Cancellation practices

Further criticisms related to the cancellation process. The key point here stems from General Condition 24.10 which stipulates that customers have to be able to use their cancellation rights during the transfer period “without unreasonable effort”.

One of the faults pointed out by Ofcom was that TTGL’s guidance for its call centre staff specified no circumstances in which operators should accept a customer’s cancel request without undertaking an effort to retain the customer.  This was seen to result in unreasonable effort for the cancelling customer and in some instances led to situations in which operators breached General Condition 24.3(c), which outlaws aggressive conduct.

The lessons

Ofcom takes a two-pronged approach in its investigations using voice recognition based analysis of telephone calls combined with a review of the providers’ training manuals.  To ensure compliance, providers will not just have to ensure that their client-facing staff are not breaching any part of General Condition 24 but will also have to provide the training resources and policies which underpin this behaviour instead of relying on on-the-job training by compliant employees.

The own-initiative investigation undertaken by Ofcom shows that this is an area of ongoing regulatory interest and operators will want to review their internal policies and employee behaviour on a regular basis to ensure their compliance.  This case also shows that where an operator is the subject of an Ofcom investigation, swift action to remedy any of the issues highlighted by the regulator can prevent enforcement action from escalating any further.