Slamming victory for O2

After the first day of a High Court hearing, Communications Direct Ltd entered into a settlement agreement with O2 admitting liability for trade mark infringement and passing off relating to the mis-selling of mobile phone contracts and agreeing to pay £215,000 for O2’s legal costs and damages. O2 commenced legal proceedings against Communications Direct Ltd in March 2007 following a rising number of customer complaints about companies making cold calls to O2 customers claiming to represent or be associated with O2. These cold caller companies, such as Communications Direct, have been offering to upgrade the customer’s O2 package when in fact they represent other networks. If the customer agrees to the ‘O2 upgrade’, the customer is actually transferred unknowingly to another mobile network instead. In addition to the company itself committing to an undertaking to immediately cease infringing the O2 trade mark through such practices, two directors (one current, one former), Matthew Burge and Marc Winchester have given personal undertakings to the same effect. Communications Direct Ltd is the second mobile phone provider O2 has taken legal action against for trade mark infringement and passing off. Landmark Marketing Services Ltd (trading as Landmark Communications) who offer airtime contracts on behalf of other networks, was another company that had persistently targeted O2 customers. Through Landmark’s actions, significant numbers of O2 customers had been churned away from O2 without the customers’ knowledge. In December 2006, Landmark entered into a settlement agreement with O2, agreed to put a stop to the practice of mis-selling when selling mobile phone contracts and paid O2 a substantial amount in compensation. ‘Slamming’ is the term used when a customer does not realise that they have been misled into signing a new contract with another network until their new handset and paperwork arrives. Feedback received from customers who have been mis-sold or slammed indicates dissatisfaction with inferior network coverage on the new network, the quality and/or specification of the phone and the level of customer service provided. In a committed programme of legal moves to prevent mis-selling and slamming, O2 is continuing to review and act upon customer feedback that has been received in relation to other cold call companies throughout the UK. O2, is currently in pre-litigation correspondence with 4 such companies Customer complaints are key to tackling this practice and O2 encourages its customers to report this type of activity. Through O2’s Nuisance Call Bureau, which provides help and advice for O2 customers who receive nuisance calls or text messages, any instances of alleged cold call mis-selling or slamming can be reported to a specially trained team. Customers can reach the Nuisance Call Bureau by either calling O2 customer services on the number printed on their monthly invoice or by directly emailing the team at ncb@o2.com. Even if the customer does not have the name of the company that called them, the Nuisance Call Bureau can assist in tracking them down via the telephone number used to call the O2 customer. As well as notifying O2, customers are also advised to complain directly to their local Trading Standards office, the Office of Communications (“Ofcom”), the Office of Fair Trading and the Information Commissioner. In addition to this, customers may choose to complain in writing directly to the CEO of the company who has cold called them and the network to whom they have been transferred by obtaining the relevant addresses from the Companies House Web Check Service. O2’s programme of action against slamming has led to the mobile phone industry drawing up a code of practice to help further protect mobile phone customers. This is being reviewed by Ofcom who are now also considering regulation in this area.