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The Great British Phone Swindle

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The Great British Phone Swindle

There's hardly anyone in the country that hasn't been pestered by cold callers trying to sell new contracts for gas, electricity or phone accounts.

It's always a nuisance but if you fall for the bull, it will leave you out of pocket and feeling stupid for having being duped so easily.

Hundreds of thousands of people have been conned into changing their accounts from one provider to another by unscrupulous people.

This behaviour can be found in all sectors of British industry, but right now can be found pro-actively taking place in the fixed-line and mobile sectors of the telecoms industry.

In some instances, fraudsters switch people without their knowledge or consent. At other times, they trick people into opting for new contracts by lying about the supposed benefits on offer.

One example which was shown on TV recently was Steve Game a Carpenter took a call from a saleswoman who said she was working for BT billing agents. She offered him half-price line rental and cheap calls.

Reassured that he was dealing with a big, reliable brand name like BT, Steve expressed interest in the deal.

The next thing he knew, he was contracted, without his consent, to a new phone provider called Lo-Rate.

But its saleswoman had failed to mention that the half-price line rental was for one year only, the contract was for five years, there was a connection charge on every call (BT also charge a 3pence connection if your not on one of their option packages) and the firm could also change the terms and conditions at any time.

But the company was not acting on behalf of BT at all.

When Steve Game tried to get out of the contract, Lo-Rate cut him off and demanded nearly £1,000 to release his line back, so he could reconnect to BT - his old provider.

Steve said: "I was being blackmailed." And Steve was not alone.

Complaints poured into Trading Standards about Lo-Rate's dishonest sales tactics. It raided Lo-Rate's premises and confiscated damning evidence of false sales calls.

Trading Standards officers took Lo-Rate to court, where it was fined only £44,000 (Why aren't this people being put in front of a judge? It's not as if there's a lack of evidence).

The telecoms regulator, Ofcom, then mounted its own investigation and fined Lo-Rate a further £130,000.

But why do firms get away with these kind of sales practices?

It all started when the government introduced competition into gas and electricity markets in the late 1990s to supposedly drive prices down.

Energy companies fought with each other to win new customers - and as the battle wore on, the tactics became dirtier and dirtier.

In 2002, it was revealed that London Electricity drummed up new customers by teaching their commission hungry sales staff to forge signatures and switch people they contacted without their knowledge or consent. It became known as "slamming".

Research shows more than a million people have been tricked into new contracts for gas and electricity supplies and nearly half a million people so far, have been tricked into new contracts for fixed line telecoms.

Complaints to BT about mis-selling and "slamming" by phone firms are running at around 8,000 a month.

So! I ask the question, how has Ofcom tackled the problem?

In May 2005, it introduced a mandatory code of conduct for telecom providers, with penalties for failure to comply.

Amazingly! To date, only one company 'Lo-Rate Telecoms' has been penalised.

In an official review into the problem in May 2007, Ofcom conceded that its own verbal contracts system - introduced to make switching suppliers easier for consumers – was an abysmal failure

There's recently been an initiative to put in place, a voluntary code of practice by the network operators to stop "slamming" in mobiles.

Ofcom says this is going to be good for consumers, but if the code does not work (which it won't, all voluntary codes, no matter what the industry inevitably "fail") it is ready to act.

So how can you protect yourself from phone fraud?

If anyone rings you up out of the blue offering you a better deal on your telephone, gas or your electricity and actively tries to sell you something, it's not going to be a good deal it's more likely to be a con.

May I suggest you join the telephone preference service and just for good measure the mail preference service? Stop that unwanted post.



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Reassured that he was dealing with a big, reliable brand name like BT, Steve expressed interest in the deal.

Reiable brand name? BT are almost as bad as this, with their "rolling annual contracts" pointed out in the small print, charging people for repairs that were BT's responsibility, sending bills due for payment the day after they arrive, and so on.

I remember the days where companies seemed to abide by some kind of moral code.

These days, it's more profitable for the company to rip consumers off and only back down when forced to by some regulator after which time £££s have been made.

For instance the latest BT ad about "rolling out 20Mb speeds" - what a joke, most people will struggle to get more and about 3Mbps from their ancient copper phone lines and the FTTC deployment (making 20Mb theoretically possible meaning BT might just catch up with Virgin cable in 20 years at this rate if the taxpayer digs deep enough) - and "consistently faster performance even at peak" which has nothing to do with said roll out and will get that ad banned eventually. But by then people will have signed up and the revenue will be worth more than any fine.

Buyer beware!

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