Ofcom has come down heavily on Phones 4U after a six month joint Ofcom-Staffordshire Trading Standards investigation found that Phones 4U had breached several consumer protection laws, 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.
The watchdog has received legally-binding undertakings from Phones 4U committing it to change a number of its practices relating to the sale of mobile handsets and contracts.
Ofcom said that Phones 4U has 'cooperated fully during the investigation leading 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 them 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.