Cancelling your Orange contract - what does the law say?
UPDATE: Orange has now scrapped the ToS change following consumer upset and cancellations. Existing cancellations will stand. Read full update and official statement here. All day, we've been receiving emails and reading comments concerning your attempts to cancel your Orange contract. Tomorrow, we'll be providing you with a more definitive guide detailing what action to take if your efforts have so far proved unsuccessful. Until then, the Bitterwallet and Mobot team has been digging through consumer law to ascertain where you stand.
That said, this post shouldn't be taken as legal advice for your particular situation, nor is it a substitute for the real thing. As with everything we've posted so far, this is general information. We're not lawyers or solicitors, and despite what we might tell you when we're drunk, we're not pilots or porn stars either.
Right then. The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR) apply to unfair terms in contracts concluded between a consumer and a seller of goods or a supplier of services. By the UTCCR an unfair term is one which has not been properly negotiated (such as a standard term) and which, contrary to good faith, causes a significant imbalance in favour of the seller or supplier. Any term which is unfair is not binding on the consumer, but the rest of the contract may continue in operation if it is capable of continuing without it.
Now the interesting stuff. Section 5 and Schedule 2 of the UTCCR sets out a non-exhaustive list of terms considered unfair:
- (i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;
- (j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;
- (l) providing for the price of goods to be determined at the time of delivery or allowing a seller of goods or supplier of services to increase their price without in both cases giving the consumer the corresponding right to cancel the contract if the final price is too high in relation to the price agreed when the contract was concluded;
We think customers have a good argument that the new minimum charges applying to all calls from 14 September 2009 that exceed their call plan allowance are unfair under the terms of these regulations. The change occurred after the contract, no valid reason is given, the final price is high. And this is not a severable part of the contract, it actually goes to the very heart of it. These regulations are clear that if that if the price is increased, then a corresponding right must be given to allow the consumer to cancel the contract. This right to cancel must also be fair - and so have been bought to the consumer’s attention before the contract was concluded – and so cannot now be unilaterally amended or added to, or be given an unnatural interpretation.
There are also concerns with regards to the Unfair Contract Terms Act of 1977 and the Consumer Protection from Unfair Trading Regulations 2008, but we need to you stay alert for the next bit.
With regards to Orange's Terms of Service:
The clear language of clause 15 entitles you to terminate on a change in charges if excessive in accordance with clause 4.3, provided you do so within 1 month of being told of them.
The clause refers to Charges – not Service or Price Plans – so on its very face the right to terminate applies to Out of Service Plan Charges. These minimum charges apply to all calls from 14 September 2009 other than service plan calls. These ordinary calls are not severable from the services as a whole and we certainly don't think they fall within the definition of Additional Services. Obviously we're of the opinion that the increase is excessive and is a change to your detriment. Only a court can say so definitively however.
Arguably even those still within their Minimum Terms can cancel, without having to pay the total remaining monthly charges to the end of the notice period. It's not entirely clear from the language of the contract however and there is a risk that a claim might still be made for damages for termination or breach (i.e. the usual termination charges under clause 4.2). Only a court can finally determine the correct interpretation.
Finally, you don't ever need anyone's consent to terminate a contract. You can always terminate a contract and stop your direct debit by informing your bank. The issue is whether or not you will be liable for damages for breach, and that depends on the contract language. If you terminate and Orange does not agree to it, then they may claim damages for breach - usually any standard monthly charge to the end of the notice period or until the end of any Minimum Term less a rebate for early payment.
And relax. Got that? Good. More tomorrow.