Mobile Outlet Cashback Crisis

Operating successfully for a number of years The Mobile Outlet has now been hit by the cashback crisis following encouragement from the networks to offer the deals, prompting the company to release a statement to consumers.
 

 

 

For years we at the Mobile Outlet have operated a very successful business, we have provided 30,000 number of customers with good service and paid over £4m in cashback.  

We started the cashback model following on from visits which were made by network dealer managers, who openly promoted and encouraged us as a company to run with a 40% business model, even though our model was a lot higher.  Unlike many companies we have always complied with the networks code of practice incl the 60 day redemption voucher return.  

The industry suffered a huge setback when a couple of high profile retailers shut their businesses towards the end of last year. A few of the networks reacted by removing connection codes not allowing any further connections. This was done without looking and treating each business on its own merits.  A gung ho reaction in our opinion!

Like every business we have Terms and conditions relating to sales, and it is some will say rigorously enforced, but in this we are no different to businesses like Nokia or Ford, if customers do not follow the terms or go outside these terms, then they themselves are at fault, however many will refuse to admit they have made a error and will still complain, it has to be said that the majority of our customers do comply and are happy with their phones and cashback, if they were not, we would have not been in business for so long.

The resultant encouragement by network to adopt this business model, has meant that over the last few weeks we have received complaints from customers regarding the status of their cash back applications. In order to clarify the situation and help customers and others understand our current predicament the following statement has been prepared and will be made available to all consumers.

“There has been an unacceptable delay in paying customers at present and the reason behind this is due to commissions that are owed to us being withheld from numerous suppliers. We have not issued a statement previously as we believed the situation would have been resolved by now.

Unfortunately we have not received the money outstanding and have no choice but to let our customers know of our current status. We appreciate that the inconvenience caused by delayed payments is unacceptable, but we would like to stress that we are attempting to resolve matters and the utmost will be done to ensure all customers receive any cash back due.

Chitter Chatter, one of the suppliers we are in legal proceedings with refused to pay commission due at the end of last year – citing their own financial problems. The money due from Chitter Chatter was used to apparently sustain their own financial shortfalls. This has had a negative impact on our business and subsequently our customers are having to suffer.  It is important that customers appreciate that their delayed payments are partly a result of such companies looking after their own interest before our customers, a practice which we believe is completely selfish.

Dextra Solutions is another company with which we are in legal proceedings with for withheld commissions. We believe they have closed our account unjustly and are holding commissions which our customers are entitled to.  

We ask our customers to remain patient over the next few weeks whilst we are dealing with the non payment of commissions.  We will send out an email keeping customers informed and updated as and when we have anything to report.”

The IMPDA  (Independent Mobile Phone Dealers Association) have been contacted even though we ourselves are not members, and have been made aware of the situation. We are hopeful to arrange a potential meeting with OFCOM to explore what help they may be able to offer in dealing with the issue. Trading standards are also aware of the overall status with each supplier.

Both Dextra and the networks were well aware and accepted connections knowing this model was, as it turned out unsustainable, and it is they along with Chitter Chatter, that is to blame for our current situation.  We are still hopeful of a solution to this and will be in touch with our customers.

The Mobile Outlet Management Team

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