What is mis-selling?

Most telephone companies treat their customers as BT do, with professionalism and courtesy. However, some companies or their sales staff use sales techniques that are unacceptable, sometimes illegal.

This is called mis-selling, and we're here to give you the information you need to recognise it, avoid it, and take action if it has happened to you.

There is no legal definition of mis-selling. In general terms, BT, and others, take it to refer to sales and marketing practices that are misleading, deceitful or oppressive. Most feel these practices are unacceptable, and many of them are illegal.

You could be offered a new service for just your telephone calls (Carrier Pre-selection (CPS)) or you may be offered a service that covers both your calls and line rental (Wholesale Line Rental (WLR)). Mis-selling can happen in either circumstance.

Carrier Pre Selection (CPS) - Allows customers to pre-select a provider other than BT to carry all or certain categories of their calls, without the need to tap in an access code. Customers are billed directly by their chosen carrier for these calls.

Wholesale Line Rental (WLR) - A product provided by BT to other communications providers, enabling them to offer line rental and calls direct to end-users. This usually means the end user no longer has a contractual relationship with BT and is billed by the WLR provider.

Key facts on mis-selling

BT has been receiving 1,820 alleged mis-selling reports a month from SME customers. In a recent survey of 1,000 SMEs conducted for BT:

• 59% had experienced mis-selling of telecom services, compared with just 46% six months earlier
• 38% said their business receives telecom mis-selling approaches every day or almost every other day
• 15% said they have been trapped in a business contract they believed was originally mis-sold to them - on average, these victims were stuck with the mis-sold contract for 18.3 months
• Including the time and hassle involved, as well as any legal fees, the estimated average cost of a telecoms mis-selling experience to a business is £791. 11% estimate it has cost them between £1,500 and £5,000
• The most vulnerable mis-selling group are the smallest companies with less than five employees and fewer resources to tackle the issue - 65% reported experiences of mis-selling

The Survey Shop conducted 1000 interviews anonymously by telephone over the period 10th January - 16th January, 2006. The sample was selected at random amongst owner/managers within SME's.

Mis-selling on the rise

Despite the issue gaining increasing exposure, independent research conducted on behalf of BT* shows that in just seven months (July 2005 to January 2006) instances of telecoms mis-selling have increased by 13%. While SMEs are now confident they are more aware of misselling approaches - 41% say it is becoming easier to identify such calls - increasing numbers of SMEs are falling victim to the underhand tactics of service providers firms in the telecoms market.

This latest piece of research confirms that the issue is not going to go away and it is the responsibility of all relevant parties in the industry to work together to offer guidance and implement measures that will help safeguard SMEs from misselling practices.

*The Survey Shop conducted 1000 interviews anonymously by telephone over the period 10th January - 16th January, 2006. The sample was selected at random amongst owner/managers within SME's.

Common examples of mis-selling

• 'Slamming' - this is the most extreme form of mis-selling when a telephone company transfers your calls and/or your phone line without your consent or knowledge. There are cases where unscrupulous sales people have gone as far as forging signatures.
• 'Just sign here for more information' - When a sales person gets you to sign a contract under false pretences, telling you they need your signature as a formality, or to send you more information for example.
• Misuse of cancellation rights - When you call another telephone company just to get information, but they insist that the only way you can do that is to agree to transfer to a different type of service, which you can cancel at a later date.
• Signing forms for other services - if you buy company mobile phones, you may be asked to sign a number of forms. One of these may also transfer your fixed lines to a new company without this being made clear.