Dealers, Networks and Ofcom Investigate Cashback Deals

By: John Gray

Dealers from across the country have met with Ofcom to discuss mobile phone cashback deal issues and to get networks to police such deals and remove claw backs. Clawbacks are when the network takes back its commission from the dealer if the customer fails to keep up payments on their mobile phone contract.

12 dealers from the IMPDA - International Mobile Phone Dealer Association who represent approximately 490 dealers attended the investigation into cashback and mis-selling. This is the first time mobile phone dealers have had an influence on changes being made by Ofcom. It is thought that a similar meeting will be held with Ofcom and distributors and Ofcom's findings will then be published in March.

Dealers have blamed the networks for encouraging retailers to offer cashback deals so that they can achieve new customer connection targets. They also pointed out that they cannot offer as good offers as the networks direct deals, giving networks the advantage. They also noted terms around contract renewal (for example when the network rings the customer directly and offers them a direct bespoke deal) as another reason that dealers entice customers with cashback deals.

Dealers have requested that networks remove clawback's against dealers once connection has been made excluding fraudulent sales. They also want the networks to police cashback deals and for legislation to enforce full cashback payments within 90 days and penalties for failure to comply.

These changes will hopefully see the end of cashback scams and the beginning of cashback deals that are no hassle and fair.

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