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Ofcom fines Unicom £200,000 for mis-selling phone services

Wednesday, July 29th 2015 by Phil Wilkinson-Jones

Ofcom has fined a business telecoms provider £200,000 for mis-selling landline telephone services.

The telecoms regulator has also told Universal Utilities Ltd, trading as Unicom, to compensate customers affected by the mis-selling.

Ofcom launched an investigation into Unicom’s selling practices after receiving complaints from customers.

The company, which provides phone and broadband services to around 100,000 small businesses, submitted evidence as part of Ofcom’s initial enquiries.

The investigation found that between 1 March 2013 and 8 July 2014, Unicom misled prospective customers over the costs they could face should they leave their current provider.

The company also misled some prospective customers into thinking that transferring their landline 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.

As well as imposing a £200,000 fine, Ofcom has told Unicom to compensate any customers who were misled in the specified ways during the period investigated.

The company must also allow those customers to exit their contract without penalty and cover the cost of reconnection charges if those customers choose to return to their previous provider.

'Take action'

Unicom has also been told change its policies, procedures, marketing and sales materials, and provide appropriate training to sales staff.

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.

Last month, Ofcom announced an agreement with three of the UK's largest suppliers – BT, TalkTalk and Virgin Media, which account for the majority of business broadband users – to work on a new Code of Practice for business broadband services.

The code for business broadband, which Ofcom aims to publish in the autumn, is expected to set commitments for providers to give accurate estimates of the actual speeds that business customers will receive.

After publication of this story, Unicom told Cable.co.uk: “We pride ourselves on our level of service to our small business customers. We have been constructively engaged with Ofcom on a number of points and we are pleased that there were no adverse findings relating to three of the four areas listed in the original investigation notice.

"We are disappointed, however, that Ofcom has reached its conclusion today on the one remaining area. Recognising that we fell short of expectations for a limited number of landline customers between 1 March 2013 and 8 July 2014, steps have already been taken to ensure that this does not happen again.

“We are proud to be a competitive alternative to BT for small business customers, and apologise to those who, in this case, have not received the high level of service they should expect."

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