Cashback deals no longer a headache for consumers

Some extremely heartening news for me that I wanted to share with you. A large part of my career has been spent dealing with, and training others to deal with complaint escalations. A very satisfying role, but there have been few situations over the years when I’ve thought the industry was making a rod for its own back. The phrase ‘cashback deal’ is definitely one that led me to thinking, ‘here we go again’.

Cashback deals are promotions often used by third-party dealers and retailers. Independent of the mobile network chosen, an arrangement is made between the customer and retailer agreeing that after a certain time period, if the bills have been paid correctly, the customer can claim back a large portion of their line rental charges as ‘cashback’.

This type of offer often appeared at the top of internet value league tables, because the total cost of the package seemed to be much lower than other deals. And if the cashback deals were administered fairly, all would have been well.

The problems often, and I do mean often, arose when customers tried to claim the money back. You can see from the table at the start of 2008 Ofcom were dealing with 500 complaints about this a month, the tip of the iceberg because most complaints would be made directly to the mobile networks, or more correctly to the retailers involved. To qualify, customer would have to prove they’d paid bills, but documents would mysteriously disappear in the post, even if sent by recorded delivery. Customers could find out they missed previously unexplained qualifying dates, bizarre vouchers might need to be exchanged, or retailers could even cease trading. Let’s just summarise by saying there were a number of unusual barriers involved in getting a claim approved.

It’s fantastic for me to see this problem seems to be virtually extinguished. Ofcom has no formal powers to regulate high-street retailers or off-shore cold calling, but the combination of a crack-down by the mobile networks on the behaviour of their retailers, action by consumer groups and increased customers awareness seems to have eliminated the cowboys. Cashback deals still exist, but consumers can buy with a much higher degree of confidence, as the table shows.

Complaints still happen, but I’m genuinely delighted to see the level around cashback so low. There’s still work to be done on mis-selling and slamming, but the trend is also down. Mis-selling is a broad category, usually occurring where a consumer alleges they’ve been told a service is free or inclusive at the point of sale, only to find out it carries a charge or just isn’t available. Slamming is the illegal switching of a subscriber's phone (or other utility) service to another provider without their consent.

Originally published at OneMobileRing.com