The Daily Mirror has awarded mobile operator 3 its’ ‘Awful Service Award’ for 2007.
The paper reported: It looks like 2007 will be remembered as the year that the brakes finally went on the great mobile cashback robbery.
But we predict there’s plenty more pain to come in a rampant rip-off that’s already cost punters more than £100million.
Which is why we’re handing our annual Awful Service Award to the architects of this particular scam.
It’s more than a year since we began exposing firms that offered huge rebates on mobile contracts – then failed to honour them later.
Most cashback dealers operate strict terms and conditions that are designed to deter customers from claiming.
Watchdog Ofcom has branded them unfair and looks set to ban them next year. In recent months, a procession of dealers – Dialamobile, Click, Mobile Media Systems – have gone bust owing around £30m between them.
Now online 3 dealer Simply Communications UK has suspended cashback payments after it failed to “anticipate high levels of redemptions”.
And it looks likely that more dealers will go to the wall.
The fact is many of these deals were clearly unaffordable with payouts by retailers to customers often far exceeding the commissions paid to the shops by the networks. They were simply too good to be true.
So why didn’t the networks – Orange, 3, Vodafone and T-Mobile – smell a rat and dump the dealers before the dealers dropped their customers in the mire?
That’s because there’s only one winner in the cashback lottery and that’s the network which ends up with customers locked into fixed contracts regardless of whether they get their cashback or not.
One network in particular – 3 – did not simply allow its dealers to play the “redemption game”.
It actually encouraged dealers to offer cashback deals so that only four in 10 customers would be likely to successfully claim.
That’s why we are giving 3’s sales director Marc Allera and his team our Awful Service Award for deliberately filling their coffers at the expense of their customers.