Beware mobile phone "slammers"

By Jennifer Hill, Personal Finance Correspondent

LONDON (Reuters) - The communications industry regulator is poised to take action against mobile phone operators, amid a growing problem of rogue salesmen switching people to expensive long-term contracts.

Ofcom has seen complaints about the process, known as "slamming", soar this year and a voluntary code of practice, introduced in July, is failing to stamp out the problem.

It involves salesmen cold-calling with the promise of a free phone upgrade or discounts. Customers think this comes with no strings attached, but then find they have been locked into an expensive new deal.

Complaints rose to around 400 per month this summer, almost double the number from six months previously.

Ed Richards, chief executive of Ofcom, said there was a "lack of evidence to date" that the voluntary code -- introduced following assurances from mobile industry players that they would tackle the problem -- would be "sufficient to ensure consumers will be protected".

"The problems of fixed line mis-selling now appear to be being replicated in the mobile world," said Richards in Ofcom's annual lecture.

"Consumers are finding themselves signed up to long-term contracts by third party re-sellers who have misled them into changing their provider or service package, often with the promise of cashbacks that sometimes simply do not materialise."

The watchdog has launched a formal review of the code and will "have no choice but to set mandatory standards backed up by the full weight of Ofcom's powers", if it is found to be inadequate.