Companies are using misleading practices to lure and keep customers. Some are switched to another provider without their knowledge or consent, a practice called slamming, while others are prevented from switching to an alternative operator.
Some telecoms companies pretend they are a rival company to fool customers into signing up, while others do not tell customers on sign-up that a contract has a minimum period or what the penalties are for leaving the contract before that period has elapsed.
"Far too many consumers are being misled by fixed-line companies and this investigation will lead to take firm action against those who disregard the rules," said Ed Richards, Ofcom's chief executive. "We want to make sure that consumers are treated fairly and are able to take full advantage of the increasing choice and lower prices that competition is delivering.”
Ofcom last launched an investigations programme in 2005 to crack down on misleading selling of phone services, and it said that this resulted in a drop in such behaviour by companies.
"This helped to reduce fixed line telephony mis-selling complaints to Ofcom from a peak of 1,200 per month in 2005 to around 350 per month in January 2008," said an Ofcom statement. "However, the rise of new products such as those based on local loop unbundling is now fuelling an increase in consumer complaints which is why Ofcom is extending its investigation."
Anyone selling communications services must be member of a dispute resolution scheme for dealing with consumer complaints. Ofcom said that it would begin its investigations with those companies which were not signed up to schemes such as Otelo or Cisas.
"Ofcom has asked companies to confirm either that they will join such a scheme or to provide evidence for not being classified as a communications provider," said the Ofcom statement. "Ofcom will take action against providers who fail to join a scheme. Ofcom is able to levy a fine of up to 10 per cent of relevant turnover for non-compliance."
