A six month joint Ofcom-Staffordshire Trading Standards investigation found that Phones 4U had breached several consumer protection laws by: not providing customers with a refund when they returned faulty handsets within a reasonable period of time, that were purchased directly from Phones 4U; including unfair terms in their handset return policy; using unfair terms contained in 'chequeback' schemes; and making misleading, false or deceptive representations or omissions to consumers about matters such as network coverage in particular areas, or what was included in their mobile phone plan.
Since the investigation began, Phones 4U has made changes to a number of its consumer policies and processes, in particular its: handset return policy; 'chequeback' terms and conditions; sales practices, particularly relating to informing consumers what their network coverage will be, what their mobile plan will contain and cancellation rights and upgrades.
Ofcom stated that Phones 4U has cooperated fully during the investigation which has led to a substantial reduction in complaints. In addition, Phones 4U implemented changes to its staff training procedures and operations which enabled Ofcom to swiftly complete its investigation. Ofcom, in conjunction with Staffordshire Trading Standards, will monitor complaints in relation to Phones 4U to make sure that it complies with the undertakings.
If Phones 4U breaches the undertakings then Ofcom can apply to the High Court or County Court for an Enforcement Order to stop it engaging in a particular practice (after giving Phones 4U an opportunity to respond).
If a company breaches an Enforcement Order then it is in contempt of court which could lead to a substantial fine.