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Telecoms regulator Ofcom has vowed to crack down on mis-selling by phone and broadband providers.
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.