Orange 100pc claw backs scrutinised

The Independent Mobile Phone Dealers Association (IMPDA) said it will bring up Orange’s new clawback policy at a meeting with Ofcom’s Anti Competitive Behaviour Committee on July 15.

Orange announced on July 1 it will clawback 100 per cent of dealer sales commissions on customers failing to make more than 10 minutes of calls per month.

A Mainline bulletin warned dealers: "There must be a reasonable level of genuine and regular call/data usage. A connection must make an average of at least 10 minutes per month of outbound calls (or equivalent value data usage) over a rolling three month period to be considered ‘active’. Below this, the connection will be deemed ‘inactive’."

IMPDA chairman Chris Caudle said: "You can understand commission being taken if a customer is fraudulent, doesn’t pay or disconnects, but this isn’t right.

"What if a customer is in hospital, or doesn’t want to be contacted? Dealers should not be punished for this.

"I understand Orange clawing back some commission if a customer moves to a lower tariff, but 100 per cent is ridiculous. Reducing it to the amount it was worth at point of sale is acceptable."

But an Orange spokesman responded: "We believe the changes made are fair as we are looking to overcome the issue of ‘phantom connections’; connections made, but never actively used.

"They are most common when connecting SMEs who have a master handset with a number of other users on the account. This can mean we pay a commission to dealers for connections which are sometimes never used.

"As we are in a hugely saturated market our focus has to be on the quality of our new and upgrade connections, rather than just the quantity."