Telecoms regulator Ofcom is to spend up to six months investigating Phones4U over alleged mis-selling of mobile phone deals.
The retailer is the first in the UK to face an inquiry by Ofcom despite the issue being a common consumer gripe.
The regulator said it had received a large number of complaints about alleged mis-selling and other issues by the independent retailer.
Phones4U said it would co-operate fully with Ofcom and act if required.
"Ofcom's investigation will consider whether Phones4U has engaged in conduct which infringes any relevant law and harms the collective interests of consumers," the regulator said in a statement.
It is thought the probe could involve looking into cash-back deals, prompted by complaints from customers to Ofcom and the advice centre Consumer Direct.
To be honest, it's about time Ofcom got off their arses, stopped concentrating on interfering with everything BSKYB do, and investigated ALL these mobile phone retailers, both high street and online, as they are practically all scammers, the entire industry is a scam for the consumer.
It's yet another market where the UK consumer is ripped off left right and centre, and we never get anyone standing up for us. Even our very own government side with the mobile phone networks in the interests of increasing their profits as opposed to offering the customers value for money and good competition.
The investigation is a start, but nothing more; they need to do the same with all the retailers and networks, not only for shady dealings, but also for the way the networks actually operate and price fix their services. BBC News Report