A minority of customers are being short-changed, Ofcom says

Ofcom said it was prepared to use large sums to fine firms which broke industry rules, to ensure public confidence in the sector was maintained.

Competition has intensified in the broadband and telecoms markets with the likes of Carphone Warehouse, BSkyB, BT, Orange and Vodafone vying for business.

Rules making it easier for people to change supplier come in next year.

Level-playing field

Firms flouting these rules, which come into force in February, and other regulations will potentially face a maximum penalty of up to 10% of their turnover.

There is a threat that if there is mis-selling, then confidence in the market will suffer and that is not acceptable Ofcom spokesman

Ofcom stressed that the broadband market was generally working well for consumers but added that it had a duty to deal with a "minority" of cases where people were being short-changed.

"You will see a crackdown on rogue operators that are trying to implement scams and those companies dealing in unfair methods of competition," an Ofcom spokesman said.

"There is a threat that if there is mis-selling, then confidence in the market will suffer and that is not acceptable."

The regulator insisted that it would not investigate companies for the sake of it but wanted to ensure a "level-playing field".

It is concerned that some broadband customers are being left in limbo when they change suppliers since firms are failing to provide codes enabling them to transfer smoothly.

Ofcom is increasing penalties for other forms of mis-selling with fines for firms guilty of making silent phone calls set to rise to �50,000 next year.