I was not surprised this week to be sent a press release following on from the meeting the networks and Ofcom had with Roger Godsiff Mp for Birmingham Sparkbrook and Small Heath.  Roger Godsiff has pledged to continue the fight on behalf of the victims of Dial a Mobilecashback deals following a meeting with the 'Big Five' airtime providers.

Dial a Mobile, the Bordesley Green retailer, went into administration recently owing £12 million in cashbacks. Many of its customers affected, estimated to be about 90,000, live in Birmingham. Another retailer also went into administration recently, with estimated debts of between £4million and £10million.

Speaking after the meeting with the airtime providers- Orange, 3, 02, Vodafone and T-Mobile - Roger said "The airtime providers, whatever they might say, are complicit in the collapse of Dial a Mobile and there is mounting proof that in order to get a steady stream of new connections they were prepared to tolerate retailers operating unsustainable cashback schemes which would lead to insolvency if more than 40% of customers applied for their cashbacks. Ofcom, the industry regulator, must outlaw these cashback schemes because they are nothing more than 'scams' and when the retailer goes bust and cannot pay the cash back the airtime providers are still sitting on highly lucrative contacts and are pursuing customers through the Courts to pay-up the contracts!"

"I believe that, providing customers return the phones they were given, the airtime
providers should tear up the contracts because many people were misled into signing them and were promised cashback money which they have never received."

The debate on cash-backs is going to continue and will no doubt gather momentum. This is a severe warning message to all of those companies who are currently offering very high cash-backs offers, which are well above the commissions paid by networks.

Many of these companies will have already been reported to Trading Standards, and may have a number of CCJ’s against them for non payment and also have had a great deal of complaints laid against them on many forums.

The IMPDA would say to those companies “Please fall into line with all other UK dealers and offer cash-backs which are no more than the commission you receive less the cost of the phone "

If by your actions, Ofcom does outlaw cash-back offers with immediate effect, as per the MP’s request, your actions will damage the reputation of the industry even further.

By offering cash-backs of £700, £875 or even £1, 050 which was seen on one site by the MP’s is stupidity of the highest degree, and they are clearly being offered with the intention of non-payment.

We would urge those companies to take immediate steps to reduce these stupid cash-back amounts with immediate effect and to improve the way you deal with customers cash-back claims resulting in a better consumer experience.

If you do not heed the warning signs, then it will not be long before either you go out of business because you cannot pay cash-backs, or you will be forced to close by the MP’s or Ofcoms regulations.

The choice is yours of course but if you don’t change then you will be responsible for further damaging the industry and decent dealers