Updated UK regulator Ofcom has completed an investigation into miss-selling at Phones4U, and concluded that the high street retailer had concocted terms and conditions that were illegal, as well as giving potential customers bad advice.

The investigation was opened in May in response to complaints from the public and in conjunction with Staffordshire Trading Standards. Phones4U told us at the time that it would "act accordingly" if the investigation showed it to be at fault, which is exactly what transpired.

According to Ofcom the company was in breach of the Sales of Goods Act 1979 - failing to replace and/or repair handsets - as well as the Unfair Contract Terms Act of 1977 and the Unfair Terms in Consumer Contracts Regulations 1999 - for the small print on their returns policy and chequeback promotional scheme. Last but not least, Phones4U made "misleading, false or deceptive representations or omissions to consumers in breach of the Control of Misleading Advertising Regulations 1988".

Ofcom's mandate is to protect consumers, not issue punishments, so the result of the investigation is changes to the small print and a new round of staff training to avoid "the making of representations and omissions to consumers regarding network coverage, contract buy out offers, mobile plan characteristics, 'unlimited' internet usage, cancellation rights and upgrades".

Staffordshire Trading Standards will ensure Phones4U complies, and Phones4U has promised to play nicely from now on, so Ofcom is closing the case. ®

Update: Phones4U has now issued a statement, explaining that the majority of failings in handset returns were down to an outsourced supplier, who has now been dumped. They also admit to making a few "minor changes" to their T&C, and reckon that "this matter has now been fully resolved" - so do let us know if your experience differs.

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