How effective is the telecoms watchdog Ofcom at safeguarding consumers’ interests? Nic Cicutti, Moneysupermarket.com Editor delves deeper into the world of mobile phone cashbacks...

To read this article, click here.

To read Nic's previous article on cashbacks, click here.

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Community

Hi,

Ofcom although hold some responsibility for the shambles, the OFT are the biggest joke. Their duty is to protect the public from the cash back scams and they have had ample opportunity to deal with this. The biggest problem is what happens to these business in relation to the workforce and the the money that is generated. I think it is this issue that constrains their hands and is more political than we give it credit for.  

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Regards

Ian

Attn: Nic Cicutti

I read your post (dated 3 Dec 2007) on the issue of mobile phone cash back, and wonder if you have comments on my points here.

I am currently gathering evidence against my contracts which I believe were mis-sold and therefore to be canceled.

I am of the opinion that the dealer who arranged the contracts was acting as the network provider's AGENT because of the following:

1. The dealer did not buy the 'air-time' from the service provider for re-sale to us, instead acted as an adviser. Therefore they acted in the capacity of an agent and not as dealer;

2. The dealer did not buy the mobile phones for re-sale, the service provider had sent that to us on one and the same contract and the hardware belongs to them for the life of the contract under its credit terms. Again no dealership but agency!

3. The service provider knew of their dealers discount methods (in particular the nature of cash back which we were informed that it was funded by the network provider).

Hence I classify the dealer as the service provider's AGENT. and under contract law, the service provider is responsible for the discount (in this case in the form of 'loyalty' cash back)

I will welcome your comments.

Regards

Jay

The OFT & Trading Standard should investigate matters further. I am interested if you get a detailed response.

There is a likelihood that such Cashback operators may set up/close down mid contract & consumers will still be liable at the gross sum to the main providers. The main providers such as Orange/O2 will still pursue consumers for outstanding sums.

I do believe that there is a possibility of arguing that such contracts may well be covered by the Consumer Credit Act and thereby one could challenge the main operators for outstanding cashback amounts courtesy of the 'unfair relationships' provisions of the Consumer Credit Act.

There are problems with cashback payments from Phones2u Direct, so who will be next?