Carphone Blames Indies Over Cashback

2 min read Networks & Network Services
Carphone CEO Charles Dunstone defends cashback following the push from Ofcom demanding tighter controls, and criticises small retailers, however the IMPDA doesn't agree.

The Carphone Warehouse promises to pay all cashback "Our promise to you is that we guarantee to pay your chequeback now, and in the future.The Carphone Warehouse - a better deal all round."

CEO Charles Dunstone defends their cashback deals: 'Cashback deals are a reflection of the aggression people have to get new connections. Subsidies are now significantly higher than the cost of the phones and the margins people are looking to make, so the residuals are given away as cashback.'

Dunstone goes on to blame the small independents: 'Although Ofcom is looking at it, it is an issue for customers who have bought from very small outlets, and been promised cashbacks and have gone bankrupt. It's an issue of fraud of people setting up a business, promising cashbacks and then collapsing the business rather than coming from networks or reputable businesses like ourselves.'

The Independent Mobile Phone Dealer's Association (IMPDA) takes this as a slur on the companies they represent:

We as the IMPDA refute Mr Dunstone’s statement, firstly it is far more significant than several thousand customers who have been owed cash-back payments.  Secondly we do not agree that they have all been very small outlets, certainly they are not the size of Carphone Warehouse, but many including a reputable company like Chatterbox have been in business for 10 years and they are certainly not a company set up promising cash-backs, then deliberately collapsing the business.  

As he will know Chatterbox has evidence as to why they have been placed in the position they have, and it is not only an affront to those companies but to dealers in general to suggest such a wild accusation.  

I find it very hard on behalf of UK dealers to take Mr Dunstone seriously, especially when his own company has reported (BBC 7th September 2006) £250,000 for mis-selling Insurance by the FSA, and now the latest reports (WHICH) 17th January Carphone Warehouse 'broke data laws' involving setting up customer accounts and in the wrong names breaching the Data Protection Laws, I hardly find that reputable.

If Ofcom ban cash backs then Mr Dunstones own company will also be affected as they will not be allowed to operate cash back so I fail to see his statement of making a lot more money as if he thinks all other dealers will be barred except for his.  Only time will tell until Ofcom make its decision, however we would say this, if Dunstone would concentrate on getting thing’s right in his own company and making E2Save comply with Ofcom guidelines on the 30days which they are still have not complied with, then the UK dealer community would take him seriously.

The IMPDA do not support or condone companies that blatantly offer very high cash backs knowing that they cannot pay it.  We have already had meetings with Ofcom and will be meeting MP’s on the 30th January.   We are committed to help solve this cash back situation for the good of the consumer and the UK dealers, we would hope that Mr Dunstone will support us in this but to imply that all uk dealers not the size of his company are acting in a way designed to deliberately to deceive customers has no place in the debate.

Chris Caudle
Chairman IMPDA

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