Axis Telecom and Wonga.com on the wrong side of the law
Two of the UK’s watchdogs have made their voices heard with different companies, issuing fines and warnings.
First on the warpath is Ofcom, which has fined broadband and phone provider Axis Telecom £30,000 for reportedly abusing an anti-slamming technique and “attempting to induce customers to remain in contract with Axis”.
According to Ofcom “Slamming,” is a term used to describe a practice where an ISP tries to transfer some or all of a customer’s calls and/or their telephone line without the customer’s knowledge or permission.
The regulator’s main problem with the company is that it did not adhere to the “cancel other” policy, which is a service ISPs can use if slamming takes place. It’s also unimpressed that where Axis was the Losing Communications Provider, it attempted to induce consumers to terminate their contract with the Gaining Communications Provider and/or remain in a contract with Axis, through the use of marketing statements – a practice, which is deemed unethical.
Ofcom said that it came down hard on the provider because it had previously been in trouble for similar practices in 2008 and 2009.
In the past, Axis Telecom has fought back at these claims, alleging that it believes that the use of Cancel other should be extended to be used as an objection to other competitors gaining customers when they are contracted to a supplier.
It said that this was a similar practice allowed in the energy market and helped to protect customers when monitored properly.
It added that the main issue was broadband migration, which needed to be made simpler, and suggested that Ofcom got rid of the MAC code process as customers couldn’t “be bothered to contact their supplier”.
“When they do they are won back or threatened by their existing provider,” the company added.
“To make this process efficient, we need a system like the existing landline transfer process, whereby we can transfer customers on a like for like basis without the need for a code.”
However, it’s not just Ofcom showing its authoritative hand. This week, the Office of Fair Trading went after money lending site Wonga.com and its business associates ordering them to make sure that aspects of their debt collection practices were acceptable.
The orders come after the watchdog investigated two types of communications with customers. The first was written notices and the second, recordings of a call.
Both were said to have suggested that customers had committed fraud if they didn’t act as Wonga expected. It threatened that as a result of this, customers deemed to be guilty would be reported to the police.
The wording in the call script stated that customers with jobs in the public or financial sectors should not find themselves in debt, and that this was stated in their terms of employment.
The letters and emails were sent to customers who had claimed money back from Wonga by asking their card providers to reverse a payment made to the company. They were also sent to some customers who had entered into debt management plans.
However, the OFT said there was no evidence to back any of this up.
As a result, the OFT has imposed a requirement on Wonga that its communications must not, without appropriate justification, allege that a customer has, or may have, engaged in criminal conduct or refer to the consequences of such conduct.
It’s also said that Wonga must refrain from stating that a customer should not be in debt if the customer has a certain employment status or for any other reason.