Why hasn't Ofcom banned cashback on mobile services?

Man on mobileWe think cashbacks can be a legitimate form of offer where they are offered fairly.

They enable retailers to compete with mobile service providers and result in lower prices for consumers.  Our research shows that around 80% of cashback customers are happy with the deals and have been able to claim their money.

However, Ofcom has introduced  rules - called a General Condition - which state that providers must:

  • not mis-sell mobile phone services;
  • make sure the customer intends and is authorised to enter into a contract;
  • make sure consumers get the information they need at the point of sale;
  • make sure that the terms and conditions of cash back deals offered by their retailers are not unduly restrictive; and
  • carry out certain due diligence checks in respect of their retailers.

What you can do

If you believe you have been mis-sold a service by a mobile service provider, you should first complain to it directly.

If you became a customer of the company due to it mis-selling to you directly, you should follow its complaints procedure.

If your dispute is still unresolved, and you are a residential or small business customer, you can raise the matter with the relevant Alternative Dispute Resolution (ADR) scheme.

If the mis-selling was performed by a retailer/reseller and you have been unable to resolve the issue with them, you may wish to contact the Citizens Advice consumer service.

The Citizens Advice consumer service provides free, confidential and impartial advice on consumer issues. You can contact the Citizens Advice consumer service by telephone on 08454 04 05 06 or via its website.

You may also want to let the mobile service provider know about your experience with the retailer/reseller selling their services.

If you are a business customer of over 10 employees then you will need to seek your own independent legal advice