Ofcom to investigate Phones4U for alleged mis-selling.

billsavings

Ofcom has opened an investigation into Phones4u for alleged mis-selling and other practices at the mobile phone retailer.

See: http://www.independent.co.uk/news/business/news/phones4u-misselling-allegations-to-be-investigated-by-regulator-828313.html

shere1

About time this happened, I am surpsrised they have got away with it for so long. From my experience in Birmingham town centre they are like those touts you get on holiday, annoying and will do anything to get someone signed up for a contract or upgrade their existing one.

The cashback thing is a pile of dogs poo. From experience phones4u are one of the best cashback companies around. Their form makes everything clear and it si very simple to follow. The problem company is CPW and their offshoots like e2save.

jhp

http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/05/15/cnphones115.xml

"It is the first Ofcom inquiry into a mobile phone retailer and follows a spike in complaints over the past six months. An Ofcom spokesman said it was claimed some Phones 4u staff had misrepresented tariff terms and mobile plans like "free minutes" and also sold unclaimable cashback deals."

mobilejunkie

Not sure why so many people get the basics totally confused! cpw has nothing to do with this company whatever. In addition, although I was initially not impressed with attempts to get answers to questions from Phones4u prior to dealing with them they are now the only alternative to cpw for cashback deals. From my careful experience with both my judgement has to be that cpw is going in the wrong direction - and the opposite one to this lot. However, I am specifically referring to cashback deals; I suspect the shops are a different kettle of fish!

Sid_Harper

Not sure where you got the notion someone's got P4U and CPW confused mj - shere1 was just saying is the big baddie in the cashback space rather than this lot.

mobilejunkie

My mistake! I misread it (time is limited nowadays!). I would once upon a time have disputed the best/worst - but they are correct right now! In fact I got my latest monthly contract with Phones4u in effect. Apologies!

chocs_away

Do we think that big cash backs are on there way out if Offcom have decided to make a display of there power with 4U. Talking generally I don’t see how promising to pay 12 months free to customers and then making it almost impossible to get paid can be right. I also can't see how 12 month free deals can work without refusing to pay a certain percentage of people claiming them. I have spent a bit of time trying to work the 12 month free deals out. If you take a 12 month x £35 deal this is what I have come up with.Line Renal £35 per month = 12 months x £35So the total income from us to the network is £420 which we pay to them in monthly line rental costs. On top of this, there is the cost of the handset which the dealer has to buy in order to supply us. I guess a low end handset would cost them around £100 pounds, a bit less if it were a really old model. So you can see that the most they are going to earn out of us, over the year if we don’t go out side our bundles would be £420. Then we need to take off the handset cost and we are left with the astounding fact that they have at the most £320 to play with. Don’t forget network costs, staff costs, despatch and that wonderful thing called profit either. So the outcome of this small calculation is this. If you take out a 12 month cash back deal expect to fight like crazy to get your money, as they are at least £100 light on the deal. Expect to go to court if you want all your claims paying and in the worst case expect to lose your money when they go bust. In the early days of cash back deals they started low and sensible but due to competition the ante has increased, at first it was a sustainable model but now it is not. The only way you can run a business using this model is to create lots of hoops for us customers to jump through and number of legs sticking out to help us fall on the way. So it is guaranteed that 12 month free is at best a lottery. I have bought many phones over the years many with 12 months free and I have been paid out by all until quite recently. Times have changed though, most companies that were doing great cashback deals in the pats have either gone now or playing silly ******* when you try to claim. I think the only safe deals around at the moment are probably deals with gifts or cash backs that you get straight away, because you get them within a few weeks of buying your phone. Putting that aside though I have had a good run for a few years where I didn’t have to pay a penny for my mobiles. I feel a little sympathy for the people that fell at the hurdles because they didn’t realise what they were letting themselves in for.So that’s my ranting done, Offcom have got teeth and I wonder who’s next?

hellomoneyfromaus

thanks for the info

alnsv1000s

The sales staff in the big multiples are paid a very low basic and have high targets to earn commission.

I also heard a couple of days ago, that the stores have an infra red beam that counts people as they come in and they are targeted on the amount of sales versus the amount of people that come through the door.

That is why you may see Phones4U staff in the street, speaking to people before they come in, so they don't come in, if they are not going to buy anything.

I also heard that the Network retentions/sales department also are targeting on closing the deal at the first call.

So all the mis-selling could be due to high targets and other factors placed upon the store staff.

I would think that this applies to CPW as well.