Reporting regulatory breaches and systemic problems to Ofcom


In March 2018, Ofcom wrote to both Ombudsman Services and the Communications and Internet Services Adjudication Scheme (CISAS) to state:

“As well as assisting individual consumers who may feel a complaint to their CP (communications provider) has not been resolved promptly and fairly, ADR schemes benefit consumers more broadly. Firstly, they encourage CPs (communications providers) to achieve early resolution to avoid the need to escalate matters to an ADR scheme. Secondly, they can bring to light practices by CPs (communications providers) which may not be limited to individual consumers and which may be adversely affecting the CP’s wider customer base. Some such matters may involve potential breaches of Ofcom rules (including the General Conditions of Entitlement).

“These broader benefits are part of ADR schemes remaining “effective” as required under section 54(2)(b) of the Act, and it is important as part of that for Ofcom to be sufficiently informed about complaints and rulings which appear to indicate the existence of a practice across a CP’s business which is likely to harm consumers and/or which appears to be in breach of existing Ofcom rules.

“For the above reasons if, in the course of their work, approved ADR schemes may come across information that would be likely to support Ofcom in carrying out our statutory duties to protect the interest of consumers, we consider it should be disclosed to us at the earliest opportunity.”

Ofcom asked Ombudsman Services and CISAS to discuss how this information should be reported. The schemes have now agreed on an approach. This document confirms the approach.  

Types of issue to be reported

There are two types of issue the ADR schemes will potentially share with Ofcom:

  1. Complaints involving a potential breach of the General Conditions.
  2. Complaints indicating a significant issue causing consumer detriment within the communications sector, which does not represent a potential breach of the General Conditions, but which may nevertheless influence future Ofcom policy.

1. Potential Breach of the General Conditions

Not every potential breach of the General Conditions will be reported. One-off incidents, able to be resolved by the ADR scheme’s dispute handling process; and relatively trivial breaches of the General Conditions, where the provider has rectified the problem, need not be reported.

However, Ofcom wants to be aware of:

  • significant breaches of the General Conditions;
  • issues that have the potential to affect a wide group of customers; and
  • issues that the provider has declined to address when raised by the ADR scheme.

For example, Ofcom will be interested in issues such as:

  • several complaints about automatic renewal clauses within consumer contracts;
  • one complaint that shows a price rise notification without reference to cancellation rights (a wider group of customers could potentially have received the same letter).

Ofcom would not expect the ADR schemes to report issues such as:

  • a single complaint where an agent refused to provide a Porting Authorisation Code (PAC) over the telephone, where no further complaints are received;
  • several occurrences of customers unable to register a complaint via the provider’s webpage due to a technical issue, which has subsequently been resolved.

Before reporting a potential breach of the General Conditions, ADR schemes should first contact the communications provider giving it the opportunity to justify its actions or resolve the problem. We want to work with companies to help improve the services they offer. These relationships could be damaged if issues were reported without allowing the opportunity to put things right. Clarifying the companies view on an issue will help determine whether to report it. This will ensure that the issues referred to Ofcom are relevant.

For clarity we will report all significant breaches of the General Conditions to Ofcom, regardless of whether the communications provider takes steps to put things right.

There may be occasions where a breach is so serious and/or is causing ongoing detriment to significant numbers of customers that we need to report the matter to Ofcom without delay.

2. Other systemic issues

We regularly review complaints where there has been no breach of the General Conditions, but a customer has been treated unfairly and the same issue is likely to impact other customers. For example: a new product resulting in frequent out of bundle charges due to a communication failure at the point of sale; or concerns about the format of bills. Ofcom has confirmed that it will be interested in some such situations, where there is:

  • a serious problem;
  • the potential for a significant number of customers to be affected; and
  • no agreement from the provider to take action to address the concerns raised by the ADR scheme.

As with potential breaches, we expect to raise the issue with the communications provider in the first instance, before deciding whether to report the matter to Ofcom. Where the provider does take action to resolve an issue, we would not routinely report such matters to Ofcom.

How will potential breaches and systemic issues be reported?

Contact will first be made informally with the service provider. This will allow the opportunity for the potential breach or systemic issue to be discussed and fully understood. If, following discussion, it is determined by the ADR scheme that there is no issue of significance, this will conclude matters and the issue will not be referred to Ofcom.

If, following discussion, it is determined that there is an issue of significance, the ADR scheme will formally write to the provider. The letter will describe the issue and allow the provider 14 days to confirm its view and/or the action it is taking to resolve the problem.

Following consideration of any comments or action taken by the provider, a final decision will be made whether to report the issue to Ofcom. The provider will be informed of this decision and the matter may then be included in a quarterly report to the regulator, if appropriate.

As mentioned, reporting to Ofcom may be more immediate if this relates to a serious issue requiring the attention of the regulator.