Mobile phones legal issues

Woman in blue suit selling customer phone in phone shop

The following is an outline of some of the key points of legislation that you should be aware of.

What licences does a mobile phone business need?

Despite the fact that network operators at the top end of the mobile phone industry are heavily regulated, there are currently no licensing requirements relating specifically to mobile phone retailers.

You should however be aware of the following:

  • if you sell ringtones for mobile phones you must get a Ringtone Licence from PRS for Music. The cost of the licence is calculated as a percentage of sales
  • if credit facilities are offered to consumers (for example to spread the cost of an expensive purchase) you will need consumer credit authorisation from the Financial Conduct Authority (FCA)
  • if background music is provided in the shop you will need a further licence from PPL PRS Ltd
  • if you keep computerised records of individuals' personal details, for example for SMS marketing purposes, you may be required to register as a data user with the Information Commissioner's Office (ICO). From May 2018 the General Data Protection Regulation introduced additional protection for personal data
  • if you sell, advise on, arrange or assist in selling general insurance - for example phone insurance - you either need to be directly regulated by the FCA or become an authorised representative of an FCA authorised principal insurer, even if insurance is only a small part of your business

Mobile phone reprogramming legislation

You should be aware of the Mobile Telephones (Reprogramming) Act which outlaws the reprogramming of the IMEI numbers in mobile phones, PMR, pagers, amateur radio equipment and other portable communications devices. This legislation was brought in to reduce the number of thefts of mobile phones and other hand-held devices. This was further strengthened by the Violent Crime Act which makes it illegal to offer to or agree to reprogramme a phone.

Ringtones

If you sell ringtones for mobile phones, you'll need a Ringtone Licence from PRS for Music.

Mobile phones and driving

The use of mobile phones and other hand-held devices when driving has been prohibited since the early 2000s. Although most people are aware that they can't use their phone while driving, you may find it beneficial to be familiar with the regulations so that you can advise customers exactly what they can and can't use - and to sell them in-car kits!

Distributor take-back scheme for waste electrical goods

Retailers who sell electrical goods to private householders are required by law to make provision for the proper disposal of waste electrical and electronic equipment (WEEE). Those that don't offer their own in-store take-back service must join a distributor take-back scheme.

Valpak runs the national distributor take-back scheme for the UK. By signing up to the scheme, you won't have to offer your own in-store take-back service and comply with the other requirements of the WEEE regulations. Your customers can dispose of their items safely and properly at a designated local civic amenity site. You can find out more about the Valpak distributor take-back scheme on the Valpak website.

Because old mobile phones often have a secondhand value, you may consider offering a buyback service to customers.

Waste batteries

If your business sells more than 32 kg of portable batteries in a year (including mobile phone, tablet and laptop batteries) you must take back used batteries from customers to be recycled. You must provide this service free of charge. DEFRA has produced a calculator tool to help businesses work out whether they sell enough batteries each year to be affected by the new regulations. You can use the tool on the Waste Support website.

Retailing

There is a wide range of legislation that applies to retail outlets and that protects the interests of the consumer. For example, goods and services must not be misleadingly described and the retail price of goods must be clearly displayed. You will be responsible for making sure that all goods or services are fit for their intended purpose and of satisfactory quality. There's detailed guidance on all aspects of trading standards legislation on the Business Companion website.

Carrier bag charge

A 5 pence charge applies in England, but small and medium-sized businesses (with fewer than 250 full-time equivalent employees) are exempt. You can get detailed guidance from the gov.uk website.

Retailers in Wales and Scotland must charge customers at least 5 pence if they supply them with a single-use carrier bag. This applies to all types of single-use bag, whether they are made of plastic, paper or plant-based starch. There is detailed guidance on the Gov.Wales and Zero Waste Scotland websites.

In Northern Ireland retailers must charge customers a 5 pence levy on all bags with a retail price of less than 20 pence (including any bags that would otherwise be free of charge), whether they are single-use or reusable.

Health & Safety, fire

You must comply with workplace health and safety and fire safety legislation.

Employment legislation

Anyone employing staff must comply with employment legislation. Important areas of legislation include recruitment, employment contracts, pay, working hours, holidays, employment policies, sickness, maternity, paternity, discrimination, discipline, grievances, dismissals, redundancies and employment tribunals.

Insurance for a mobile phone business

Contact an insurer or insurance broker and explain exactly how your business will operate - they will then explain what insurance cover you must have by law, and other cover you should consider. This might include:

  • premises, premises contents and stock
  • goods in transit (being collected and delivered)
  • cash
  • business interruption
  • employer's liability
  • public liability
  • product liability
  • motor insurance (for delivery vehicles)

It is worth noting that some buying groups and trade associations offer their members special insurance policies, which might save you money and provide the level of cover you need.

When comparing insurance quotes, uncover the differences between policies by using an insurance comparison form.

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