Posts Tagged ‘contracts’
As we know, as soon as Ofcom announced new rights for mobile phone customers last week, saying that providers should include a ‘get out clause’ in contracts- O2 changed the wording in their contracts.
So what does O2 do this week? Bump up its prices by up to 25% for existing customers. Whaddya know?
The shady, underhand move comes into effect in March, and while the average tariff will only rise by 2.7% – from £37 to £38 a month – if you go over your text or call allowance, that’s when the charges can go up by almost a quarter.
O2 have obviously found a loophole in Ofcom’s new ruling, but obviously they’re not going to admit that.
Instead, their feeble excuse is similar to the one energy companies used when they shafted us last year – rising cost of infrastructure, upgrading network, yadda yadda. Yet they must have factored that in when they set the prices in the first place.
Sadly, there’s not much you can do about this. If you signed up before January 23rd the contract you signed states that prices can go up no more than RPI (retail price index) inflation, no more than once every 12 months. Which means that every year, prices will go up in line with inflation.
O2 had their answer ready: ‘Ofcom has confirmed that communications providers’ terms which explicitly provide for a customer’s monthly subscription to change each year in line with a specific percentage or index (like RPI) will not contravene its “fixed means fixed” guidance.’
So fixed means fixed, even though it isn’t.
A matter of hours after Ofcom slapped mobile and broadband providers with new rules which meant customers didn’t have to put up with providers changing what they charged on fixed contracts, O2 have changed their terms and conditions to get around it.
So, from today, any customer who signs up with O2 has to agree that their tariff will go up each year in line with inflation, kicking off with a 2.7% increase on 1st March.
If you are already a customer, you will have already heard that prices might go up with inflation.
With Ofcom trying to put an end to this price wiggling, they’ve actually made price increases compulsory. Of course, this isn’t Ofcom’s fault, but you can bet that all the other mobile companies will soon start tinkering with their t&cs, which is typically shady of them.
How profoundly irritating and unsurprising.
Employees of super slick bookies Betfred might be getting their wages cut by almost 50%. And if staff don’t sign new contracts – which would mean some will lose thousands of pounds – they won’t be asked to stick around.
The company, which last year made a profit of £69m, is run by Fred Done and his brother Peter, who are worth a cool £850m. Yet under their new grading system they’ll be paying employees according which shop they work in – and their wages will be based on how much profit their super evil fixed odds betting machines are bringing in.
It means that some managers will be taking a pay cut from £15 an hour to £9, and the only incentive that’s being offered are 280 area manager jobs. If you don’t get that, you have to take the cut. Not a very nice way to reward your workers while you’re riding high, is it?
A spokesman for Betfred said: ‘Betfred is in discussion with its staff and the union on how we manage our betting shops in the future. There are no proposed redundancies and the changes will offer our staff progression to more senior management positions. We believe that the proposals will drive the company forward and secure the future of the business.’
A morally bankrupt business that pays their workers badly and siphons money off the poor with gambling machines that are impossible to beat? Betfred employees – down tools and leave in your droves. It’s time to work for a more ethical company – like er… McDonalds.
You see the delivery van pull up and start punching the air because you are within seconds of getting your hands on the bargain of the century. Over at HUKD, HP sold some expensive graphics card valued at £585 for just £12. Before you say it, we know it sounds too good to be true but the course of events that followed led many to believe that they had bagged one of these heavily discounted bits of kit.
HP accepted the orders, processed them from the warehouse, took payment and then shipped these with DPD and confirmed this to their customers. However, quite a few over at HUKD are now saying that once DPD had arrived and scanned the item prior handing it over, HP had placed an alert to state that the item must NOT be delivered and instead retained by DPD before being returned to HP.
When considering your legal position in this situation you must review the Terms of Sale by HP. Commonly, a retailer will state that the contract is not formed when payment is taken but instead when they confirm that the item has been despatched. So, that was exactly what we expected to see when reviewing the Terms on the HP website but instead we found their likely get out clause:
“HP reserves the right to cancel any accepted order prior to delivery, at HP’s discretion (whether or not payment was made), and this in case of any material errors in connection with your order”
So, it seems that they probably CAN recall the product right up to the moment that their delivery company rocks up to shatter your dreams. However, within your Order Confirmation they also state:
”Correct prices and promotions are validated at the time your order is placed”
“We will send you an email with estimated delivery date once your order has been accepted”
By confirming that the item has been despatched they have accepted your order which is an integral part of the formation of a contract. They are also stating that prices are validated by them when your order is placed. We have the offer, the acceptance and they have your money (consideration). So, we have a contract, don’t we?
Quite clearly some confusion not just on our part but also from HP. We are currently waiting on a response from them to clarify their position.
Good old Orange. It’s been a mysteriously long time since they’ve upset their customers, but here they are with a price rise for existing customers. And OBVIOUSLY they’ve made sure that the rise is small enough so that no one will have the legal right to cancel their contracts.
Pay monthly customers will soon see a 4.34% rise in their price plan, and as it’s below the retail price index of inflation (currently 5.4%) Orange users won’t be able to cancel. Orange’s T&Cs allow them to raise prices in line with inflation every 12 months.
Obviously, there hasn’t been a positive response to the news from customers, with some sustained outpouring of mild outrage on various popular social networks. Meanwhile Ofcom have issued an interesting statement about it all, suggesting that customers complain to Orange about the price rise, without saying that the changes cause the ‘material detriment’ that is required to justify a cancellation.
If you’re an Orange customer, you can work out how much more of your cash you’ll be giving them each month with this handy tool that they’ve bunged up on their website.
Ofcom today published a statement confirming that they are amending their General Conditions to prohibit Automatically Renewable Contracts. The General Conditions are set by Ofcom (as regulator of the communication industry) and apply to all “providers of communication” that are defined in these conditions.
To be clear, an Automatically Renewable Contract is one that “self renews” at the end of fixed term and takes you in to a new minimum contract period if you do not make your current provider aware that you wish to opt out. It is the opting out that Ofcom seem to think is not fair on consumers. They also believe that it is not good for competition in the industry in that if someone rolls over to a new contract they are then tied in for a fixed period and therefore possibly unable to benefit from a better value product or a better service elsewhere.
Ofcom’s Chief Executive, Ed Richards, said “Ofcom’s evidence shows that ARCs raise barriers to effective competition by locking customers into long term deals with little additional benefit. Our concern about the effect of ARCs and other ‘lock in’ mechanisms led to our decision to ban them in the communications sector.”
Ofcom are well aware that the implementation of this change cannot happen overnight. Therefore they are saying that Automatically Renewable Contracts are to be completely removed from the market by 31st December 2012. The sale of new automatically renewable contracts to residential and small business customers will be prohibited from 31 December 2011. Not only will this affect individuals as consumers, it will also reach out to “small businesses” who have 10 or less employees.
So, great news for consumers and small businesses. However, bad news for many communication providers. It will be interesting to see what incentives (if any) will be offered to customers to stay after their minimum period and what deals can be offered for those looking to switch away.
Any thoughts or opinions on this? Get in contact with us – email@example.com
Hola de nuevo, my flock of Bitterwallet fans! I must apologise for keeping a low profile at the moment.
While I may be a real-life litigation executive posing as a fictional Mexican wrestler, I am finding myself on the run from the Muerto Cráneo – a vicious gang of pimps and druglords from the border towns of El Paso. It isn’t safe for you to follow, mis hermosos ángeles. There are eyes everywhere.
Please know I still love you, and will return.
In the meantime, a quick tale about a recent wrestle with Additions Direct. Sirs, you may be rapscallions to a man, but I take my sombrero off to you in this instance. You have done the right thing and honoured a contract following orders made by our friends over at HUKD.
Additions Direct promoted a Logitech G510 Gaming Keyboard for just £38.95 – Amazon were selling the same keyboard for £85. It was a possible misprice, although Very.co.uk were offering the same product at the same price. The use of voucher codes brought the price down even lower, but many HUKD members agreed the price was excellent without them.
Additions Direct didn’t cancel the orders they received, but went ahead and contracted with the customer by dispatching the item – except it was a different item and not the one bought by the likes of HUKD member birdyoyuk. This was a similar issue to the one we recently experienced with Tesco Entertainment.
Once more we were gearing ourselves up for further letters, when Additions Direct realised they may not get away with what they were attempting; Additions are now sending the correct item to customers, to honour the orders received.
We’d still like to hear from you if you’ve ordered one of these items and not received it. Contact me, Len Dastard, at firstname.lastname@example.org.
Ofcom are sniffing around BT again and telling them that they need to stop handcuffing customers into repeated minimum contracts without, y’know, actually asking them first.
These contracts, which are usually called rollover contracts, are offered by BT and award late noticing customers with an intentionto cancel with a financial penalty.
That’s what Ofcom reckon anyway (so yeah, BT, if you’re suing someone, sue them, not us).
Ofcom think that around 15 per cent of UK residential consumers are on rollover contracts and, in order to stop any more from being hit with a cancellation charge at the whim of BT, they’re proposing to change regulations.
Of course, switching providers is difficult enough. Customers are often asked to pay the remainder of their contract if they decide they want to take their custom elsewhere.
The watchdog wants to see rules changed so that opt-out contract renewals in any form in both landline and broadband services are prohibited.
My name is Len Dastard. No, that’s not my real name, but a pseudonym for the purposes of Bitterwallet, to keep my real identity a mystery.
During the 1970s, I was a masked Mexican wrestler based in Veracruz, a vicious loner who fought under the name El Bastardo – Murderer of Dreams. That’s not true either, but merely part of Len Dastard’s fictional backstory.
What is absolutely true, and the reason I’m writing for Bitterwallet every week, is that I’m a full-time litigation executive; I deal with contract disputes for a living.
Every week I’m hoping to answer questions and offer advice about consumer law, using practical examples from HotUKDeals, Bitterwallet readers and elsewhere – all to help you avoid the pitfalls and get a better deal.
An interesting dilemma cropped up on the HotUKDeals forum yesterday following this cracking deal from Marks & Spencer – a 26″ Sony Bravia HD-ready TV for under £100 – reduced from £299 – with five years guarantee. Forum member eca07mc wanted to know where they stand in relation to the point of when the contract is formed.
There are four elements to a binding contract; offer, acceptance, consideration and intention. If all of these elements are in place, then a legally binding contract has been formed. This rule also applies to online contracts, but the obvious difference is that we’re not contracting in person.
Whenever you’re contracting online, you should be aware of the retailers’ Terms and Conditions before placing your order. You wouldn’t (or at least, you shouldn’t) enter in to a contract in person without knowing the terms, so don’t do it online either.
In this particular case, at which stage of the process is the contract formed? When the item has been dispatched, according to Marks & Spencer’s Terms and Conditions:
Please note that completion of the online checkout process does not constitute our acceptance of your order. Our acceptance of your order will take place only when we dispatch the product(s) or commencement of the services that you ordered from us.
However, the forum member actually received an email from Marks & Spencer to confirm that the television had been dispatched, yet received an email within a few minutes to advise that the television could not be sent.
Marks & Spencer could argue that despite sending this email, the item technically wasn’t dispatched – if it was the member would have received his television. The retailer could also argue that the contract has been frustrated in that they do not have the product to sell – the reason being is that an unforeseen high demand could leave the item to decrease in stock quite rapidly. I’d suggest they’d be on very dodgy ground citing this as a defence.
Sadly, to bring a small claim against Marks & Spencer would probably be an expensive point of principle, so I’d suggest the following options be explored as a consumer:
• Attempt to rely on another point in the terms:
For certain products and services (for example, flowers and food) we reserve the right to substitute alternative products or services of equal or greater quality and value at no extra cost to you if we experience supply difficulties.
Although, M&S could argue that large electrical items don’t fall within their definition of “certain products and services”.
• Send a letter to Marks & Spencer outlining your disappointment in the way that they have handled your order and not complying with their terms relating to acceptance.
I’d love to don the mask of death one more time and take them down with a little move I call the Hurricanrana, but sometimes it just isn’t proportionate to bring a claim against someone – it’s very difficult to show loss in these instances.
Got a consumer law-related query? Send them to me, Len Dastard, at hello[@]bitterwallet.com.
[UPDATE 16/9 - we've now published a full guide to help you cancel your T-Mobile contract. You'll find it here.]
It seems T-Mobile are trying to get away with ramping up the cost of international roaming, and they’re giving their customers no say in the matter whatsoever. When we asked for your help this morning in providing feedback and information, we weren’t expecting a response so quickly. This kind of behaviour by mobile phone companies really matters to you, and when you look at the charges T-Mobile are forcing on customers, you can understand why.
This is the current state of play; in the last couple of days, T-Mobile have sent texts to customers that state:
“From 26 October we’re changing some of roaming rates outside the EU, to find out how these changes affect you when you’re abroad see t-mobile.co.uk/row”
When you visit the T-Mobile website, you discover that in some instances the cost of receiving and making calls while abroad will increase from 50p to £1.20 – an increase of 140%. The new charges will apply to all T-Mobile pay-as-you-go and contract customers, as well as business customers who have received the text message.
This should give customers the right to cancel, because it means being unable to use their mobile abroad without paying far higher charges than agreed to when signing their contract. However, T-Mobile are telling customers that international roaming is an “additional service“, according to Bitterwallet readers:
“i said but surely when i signed up the price of calls was 55p a min yet you’re increasing those prices, surely thats of detriment to me, they classed roaming a “Service” and said it doesnt form part of your contract so they can do what they want, whats to stop them saying right when you go abroad we’ll charge you £100 a min, and you have no option but to accept that!”
“They said to me that roaming charges are NOT part of my contract hence the reason why I can’t cancel…”
That’s where we’re up to, so let’s begin with a look at the current terms of service for all contract customers – you’ll find them for yourself here (the link opens a PDF document). The conditions for cancelling a contract are straight forward:
Such a massive increase in roaming charges will obviously be of material detriment to anybody who goes abroad in the future. The big question is – is roaming an additional service, or a core service? The answer has massive implications; if roaming is classed as an additional service, it effectively gives the provider the right to charge whatever they like for calls, leaving the customer with no choice but to either pay them or not use their mobile.
First, let’s look at T-Mobiles own wording on what an additional service is:
But according to their own website, roaming is a service already included with every T-Mobile handset on any T-Mobile contract:
This states roaming isn’t an Additional Service, because it is inherent to the phone and contract. It’s not a feature you add to your phone – you and T-Mobile both accepted this functionality when you entered your contract.
Furthermore, the T-Mobile website doesn’t treat roaming as an additional service – on this page you’ll find additional services you can add to your contract. All involve paying an additional fee for bundled services and all have their own terms and conditions, entirely separate from the main terms of service.
So where are the terms and conditions for roaming? They’re in the standard Terms of Service – in fact the terms are littered with references to it. So if roaming is part of every customer’s T-Mobile contract, how can it possibly be a service that is offered in addition to your contract?
Look at that last clause – the Terms of Service state that use of roaming may be mandatory if the T-Mobile network cannot provide service. How can an additional service be mandatory?
We could go on, but there’s really no need. The bottom line is this – roaming is a core service offered by T-Mobile. It is not marketed, sold or contracted like any other additional service available from T-Mobile. There are terms governing the use and billing of roaming written into the Terms of Service for every customer.
A contract is to protect the rights of both parties, not just the bigger of the two. If customers are being told they cannot cancel because roaming is an additional service, it is likely that all operators have been briefed to say that, because by doing so it instantly overrides the customers right to cancel. If enough of an issue is made of this, then no doubt T-Mobile will simply move the goalposts – if you followed our recent skirmish with Orange, you’ll know that the operators and the company changed their tactics all the time to avoid allowing cancellations.
For now, tell us as much as you can about what you’re told by T-Mobile customers services when you speak to them. We’ll revisit this story next week, and if T-Mobile are still fobbing off customers, we’ll look at what further action you can take.
UPDATE – I’ve just re-read the Terms of Service. Let me walk through their definitions:
“Price Plan Service – the inclusive Service supplied with Your Price Plan”
“Price Plan – the bundle of Services including any Allowance provided by us to you in exchange for your payment of the Price Plan Charge”
“Price Plan Charge – the charge for the Price Plan Service”
By their own definitions, roaming is part of the Price Plan Service; it is a service that you don’t pay any additional fee for, so therefore it’s an inclusive Service supplied with the Price Plan.
“7.1.4 We can increase any Price Plan Charge.”
“7.2.3 A Cancellation Charge won’t apply if you are within the Minimum Term and:
“188.8.131.52 You are a Consumer and the change we gave you Written Notice of in point 2.11.2 or 7.1.4 above is of material detriment to You and You give Us notice to immediately cancel this Agreement before the change takes effect.”
It doesn’t matter what they tell you – roaming is part of your Price Plan. Increasing roaming charges means increasing the Price Plan Charges, and this will cause material detriment.
UPDATE: ToS rollback now confirmed by Orange executive and press office. Existing cancellations will stand. Read it here.
In the last hour, we’ve received information from two individual sources that Orange has decided not to push through the proposed changes to its Terms of Service. If this is the case, then the new charges due to begin in September will not be introduced, and customers will no longer have grounds (as Orange’s current terms and conditions suggest) to cancel their contracts.
We’re letting you know because this information has been passed on from two different sources, although it is yet to be confirmed by Orange themselves; we’ll now attempt to verify this with their press office. In the meantime, if you have been told similar by an Orange representative in the past hour or can provide a source of official information, please get in touch at email@example.com.
UPDATE: Orange has now scrapped the ToS change following consumer upset and cancellations. Read full update and official statement here.
As promised, an update on our requests for statements from both Orange and Ofcom. So far, the service provider have told us they are “looking into it”, but the regulator has been in touch. All of you who commented that Orange representatives told you Ofcom had approved the changes to their Terms of Service? That appears to have been a bare-faced lie. This is what an Ofcom spokesperson told Bitterwallet this afternoon:
I’ve looked into this and can confirm that Ofcom hasn’t approved any changes that Orange has made to its prices. We are in fact now talking to Orange to stop their customer service advisors from telling that to consumers.
This is where we are on it. General Condition 9.3 is one of the rules that all communications providers have to adhere to. Orange can charge for 087 numbers but if it makes changes to customers’ contracts it has to comply with GC9.3 which says:
GC 9.3 Where the Communications Provider intends to modify a condition in a contract with a Consumer which is likely to be of material detriment to the Consumer, the Communications Provider shall:
(a) provide the Consumer with at least one month’s notice of its intention detailing the proposed modification; and
(b) inform the Consumer of the ability to terminate the contract without penalty if the proposed modification is not acceptable to the Consumer.
Ofcom has not made any ruling on whether the current alteration to the charges are of material detriment, such a determination would be the result of an investigation.
We’re monitoring the complaints we’re receiving at the moment to decide whether to open an investigation into this. In the mean time, if a consumer wants to terminate their contract and are unable to, we advise them to follow the usual complaints procedure. This is set out in this booklet here: http://www.ofcom.org.uk/advice/guides/complain.pdf.
UPDATE 12/08: Orange has now scrapped the ToS change following consumer upset and cancellations. Read full update and official statement here.
So this whole Orange cancellation thing then – here’s the latest.
A couple of weeks ago, we revealed that Orange customers had a cast-iron way to get out of their pay monthly contracts after the company had increased some of their call charges.
Hundreds, possibly thousands, of Orange customers took advantage, word got around and the whole thing began to snowball. A few questions about how to cancel arose, and so Paul came up with a troubleshooting guide. Our comments sections began to swell as you followed the instructions and gave us feedback on how it was working for you.
The days rolled by and more and more tales of successful cancellation followed and all was good. Then, towards then end of last week, things changed dramatically. Orange have started to reject some customers’ requests to cancel, saying that their legal team have told them they’re not eligible, because they don’t go over their monthly minutes allowance and they don’t make 0870 calls, the areas where the price changes are being actioned.
They’re also telling customers to make a complaint to Ofcom if they’re not happy, which sounds like fobbing off in the extreme. A case of telling you to make a noise somewhere else, through a procedure that’s trickier and more daunting than just picking up your phone, calling Orange and quoting a contract before getting your PAC number.
To us, this new approach from Orange sounds like complete and utter bollocks. Just because you haven’t encroached beyond your minutes or made an 0870 call YET doesn’t mean that you won’t in the future. Orange are deviating from the contractual agreement you both made when you signed up with them and now they’re trying to tell you that you have to just shut up, sit still and swallow a price rise whether you like it or not.
We’ll be spending the day trying to get a reaction to Orange’s shift in tactics from cleverer people than ourselves and hopefully the picture will become clearer over the next 24 hours. Either way, we’re certain that this isn’t over yet, and if you’re a disgruntled Orange customer looking for way out of your contract, we’ll do everything we can to help you make it happen.
Keep watching the skies, people.
If Palm are trying to kill the Palm Pre, they’re going about it the right way. That’s not to say the Pre isn’t a good handset with a decent OS – all the feedback from users so far suggests it’s very decent indeed. And as we’ve discussed in the past, Palm have made the right move in allowing O2 to pick up exclusive distribution rights in the UK – that’ll prevent O2 from savaging the Pre to increase sales of the iPhone, which O2 also handle.
Canadian service provider Bell have announced the Pre will launch in the country on August 27th, and is now available to pre-order on a choice of airtime plans. Good news if you’re Canadian. And live in Canada. The bad news is this:
If you want a Pre, you have to take out a three year contract – there are no other options currently available. That means having the same handset until the latter half of 2012. To put it in perspective – it might seem the world has been banging on about the iPhone since the Industrial Revolution, but Apple only unveiled the handset two years ago.
Handsets in two years’ time will be far more advanced to what’s on offer today, never mind three. And what are the odds of any modern handset lasting that long without something going wrong? Would you dare risk your third year without insurance? Signing a two year contract is plenty to make some customers think twice – are Palm really going to let service providers peddle three year plans?
We couldn’t hunt down the rogue asterisk attached to the term so perhaps there’s a very obvious get-out clause. Hopefully the Pre will stick to the two year deals as offered in the US when it arrives in the UK later this year.
* mathematical nature of headline is entirely incorrect, intended only for promotional purposes
Yesterday we told you how Orange were making substantial changes to their basic mobile charges that allowed customers to cancel their Orange contracts. There’s a flurry of activity in the comments section, and we’ll bring you a round-up of what’s happening later in the week.
Meanwhile Bitterwallet reader Steve let us know that Virgin Mobile are also planning changes to their call charges for pay-monthly customers. Customers have been emailed the following notification:
Is this an opportunity for Virgin Mobile customers to end their contracts early? We’ve had a pick through Virgin Mobile’s terms and conditions for contract customers:
2.2 Minimum Term: This Agreement will continue for at least the Minimum Term although you may cancel it during the Minimum Term in accordance with Clause 10.
10.2 Your right to cancel: You may end this Agreement immediately in the following circumstances:
(c) if you do not accept any change that we notify you about in accordance with clause 5.3 and you notify us in accordance with clause 5.4 that you do not accept such change.
5.3 Significant changes: We will notify you at least one month in advance of any change coming into effect that (in our reasonable opinion):
(b) is a change to your Agreement, your Contract Allowance, the Services or any Additional Services you are using, or to the Charges for any Services or Additional Services you are using, which is likely to be of material detriment to you.
This contract is subtly different to that of Orange; whereas Orange clearly stated that a customer could cancel if their rights were detrimentally effected, Virgin are stating there is only a case for cancellation if such changes have a detrimental effect on how much you pay.
So where does this leave you? Well, if you call just a handful of landline numbers every month, you’re going to be far worse off – your first ten minute conversation of the day will double in price, from £1 to £2. And if you make a handful of short calls a month, you’ll be paying more than you are now, because any call lasting less than a minute will be rounded up and you’ll be charged for the full minute.
You’ll have a better chance of cancelling your contract if you a) know the relevant terms and conditions (which you do, because they’re above) and b) go through your last three bills and highlight several examples per month of calls which will cost more once the new price structure begins – so any calls to landlines, or to landlines or mobiles that last less than a minute. By doing that you’ll have clear proof, based on your billing history, that the new prices will be of material detriment to you.
Three further points:
- you don’t have to return the handset, despite what the agents may tell you:
2.4 Your handset: This Agreement only covers the provision of the Services by us to you. It does not cover any handsets or other devices you may have received with your SIM or as part of a package, either directly from us or through a third party retailer.
- the contract states that you can only cancel in writing. You can argue that the point and you’ll probably be successful, but be aware you signed an agreement that states:
5.4 Non acceptance of changes: If you do not accept a change that falls within clause 5.3 you may cancel this Agreement by writing to us within 1 month of us telling you about any change, to let us know that you want to cancel.
- the changes don’t come into effect until the 28th September; if you do cancel your contract on the grounds of detrimental change, you probably won’t be released form it until this date.
As always, let us know in the comments below how you get along. Good luck!