The telecommunications regulator has unveiled a raft of new measures to tackle mis-selling of mobile phones, following a slew of consumer complaints.
Ofcom’s regulations are intended to crack down on cashback deals, whereby customers buy a handset upfront.
In theory, they are then refunded the money over the course of the contract.
However, in practice the use of deliberately obfuscated terms and conditions has meant that many consumers have not received their money back.
Furthermore, a number of these retailers went bust before the end of the contract, leaving customers out of pocket.
The new rules will also see the introduction of harsher penalties for companies found to be flaunting the rules.
These include the threat of a fine equivalent to 10 per cent of the firm’s revenue.
Ofcom chief executive Ed Richards told BBC Online: "Ofcom wants to stamp out mis-selling in the telecoms market so that consumers can get the best that competition brings.”
According to the regulator, in late 2007 some 700 complaints were being filed every month about cashback handset schemes.