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Strengthening Ofcom’s consumer protection powers

Scam signOfcom today outlined new consumer protection powers which could soon boost its abilities to tackle scams and mis-selling.

Currently if a company is found to have breached Ofcom’s rules it is given a month to address the problem.  If it complies within that time Ofcom does not have the power to take further action.

However the new rules – which are now before Parliament – would mean Ofcom could fine the company as soon as the breach was discovered.  This fine could be up to ten per cent of relevant turnover.

Ofcom also expects to have strengthened powers to fine a company up to a maximum of £20,000 per day for each day if the breach carries on.

New regulations

These changes to the law are part of a package of new powers and requirements under the revised European Electronic Communications Framework. 

If Parliament approves proposed changes to the existing law, these new powers would be available to Ofcom from 26 May 2011.

Ofcom Chief Executive, Ed Richards, said: ‘These revised rules will increase consumer protection and enable Ofcom to take stronger action to deal with companies that do not comply with regulations.

‘This is a welcome step forward in ensuring that if companies do mislead consumers then we are able to offer effective protection.’

Further new powers

Under the new Framework, Ofcom is also expecting a range of new or altered powers including:

-        New traffic management powers which include the ability to require additional consumer information and set a minimum broadband quality of service.  This quality of service could be a minimum broadband speed to ensure a basic level of access for consumers;

-        Increased maximum penalty for breaches of Ofcom’s information gathering rules from £50,000 to £2million; and

-        The ability to set maximum retail prices for certain telephone number ranges and specify how call charges are presented where required in order to protect consumers. Ofcom recently consulted on options to use this new power for 08, 09 and 118 numbers in order to help improve transparency and consumer understanding of call charges.

 Ofcom has published a short document setting out the steps it will take in anticipation of the expected new powers it will receive.

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