Dialamobile offered to reimburse consumer’s line-rental costs every month for a whole year, enticing them to sign up to higher contracts, but suddenly the money stopped coming and the shop closed.
Consumers arriving at the shop were confronted with a sign telling them to contact Trading Standards. A lot of the consumers were under the impression that the cashback deals were guaranteed by the networks themselves, but the networks are denying liability.
On the back of this furore the IMPDA has called for all networks, distributors, and dealers to help put an end to cashback deals, or risk intervention from Ofcom.
They are proposing that all cashback deals are ceased by October 1st, giving dealers time to wind down offers. In place, the IMPDA suggests using free gifts such as consumer electronics to tempt punters.
"We are suggesting both to Networks, distributors and to dealers that they stop cash back deals and instead provide consumers with other gifts of perceived value such as CD players, Bluetooth headsets, TV’s or other goods, which can be used as an incentive but without the sometimes very complicated terms and conditions they impose until the consumer can claim their money." said the IMPDA.
"For far too long those who have been greedy for commisions have damaged all dealers and brought the mobile industry a bad name. That now HAS to change and change quickly."
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