Dialaphone and the hidden charge they tell you about AFTER you've purchased

16 July 2009

SIM cards are ten a penny these days – mobile phone networks are quite keen for you to bung their SIMs into your handsets so that they can mop up some of that lovely pay as you go cash. If you know where to look, you can get free SIMs for practically all of the major providers – after all they’re useful to have lying around just in case.

One SIM that isn’t free, but almost is, comes from Virgin, and is available through dialaphone’s website. It’ll cost you the titchy sum of just one shiny English penny. Recently, Bitterwallet reader ‘ssme’ thought that price was worth a punt and ordered a couple, after first carefully checking dialaphone’s terms and conditions for any hidden nastiness. They arrived promptly and ssme takes up the story…

“I marvelled at the fact that they had sent a 2p order via Royal Mail Special Delivery. I looked at the receipt, and then glanced at the terms and conditions on the reverse, and a particular paragraph caught my eye. Apparently, dialaphone now promise to charge customers (automatically, it turns out) £30 per SIM if no chargeable calls are made within 60 days.”

He’s right – here’s the offending section from the T&Cs that appear on the back of the receipt. It's a slightly enhanced version of the one on the dialaphone site, with the killer blow being the revelation that, if you don’t use the SIMs within 60 days, dialaphone will charge £30 to your debit or credit card.

For reference, here’s a screengrab of the same paragraph on the T&Cs on the dialaphone website (click on the pic for larger version.)

So, what we have here is a situation where Johnny Consumer innocently buys a couple of SIM cards, only to find out, ONCE HE HAS PAID FOR AND RECEIVED THEM, that using them within 60 days is mandatory if he doesn’t want to cop for a whopper of an added charge.

As our man ssme says: “If someone wades through the terms and conditions online, the least they can expect is that they are accurate and current; customers should not be forced to re-read the terms and conditions on the off chance there is a change.  They might just as well have written "You agree to a charge of £1000 if the day tomorrow has a Y in it" on the back of the receipt.  I wouldn't have agreed to such terms if I'd seen them, just as I would never have agreed to purchase under this extortionate £30 condition. But as they're printed on the back of the receipt, dialaphone would - and, in my case, did - try to hold you to them.”

Shocked by the sly bonus surcharge, ssme promptly set about doing what any sane consumer would do, namely return the offending SIM cards to dialaphone. Trouble was, dialaphone were having none of it.

He says: “I called customer services to query the inaccurate online terms, and find out how I could go about returning the 2p worth of SIMs at their expense (there is no way I would pay for recorded delivery when it was their error). The agent informed me that pay as you go SIMs "do not have a returns policy" and so "cannot be returned".  I asked what about the Distance Selling Regulations? She replied they don't apply if a company has chosen not to have a returns policy. I wish I was making this stuff up.”

Undeterred by this torrent of bullshit from dialaphone, ssme eventually managed to persuade the customer service representative to send him a cheque to cover the postage, allowing him to return the SIMs. As he says: “It’s a shocking waste of time for 2p worth of SIMs. But if I simply kept them, my credit card would be charged £60 in two months time.”

Yours could too if you’ve recently bought a couple of these SIM cards from dialaphone, so be on your guard crimefighters. Let us know if you've fallen foul of this sneaky extra charge. We’ve sent a link to this story to dialaphone and we’ll see where it gets us.

EDIT: Victim of the piece ssme has emailed us to add: "As far as i can tell, the printed T&Cs apply to ALL PAYG products, not just cheap SIM cards. So if you already have a SIM and fancy a new phone, if you take delivery and stick the SIM in a drawer, you will still be liable for the £30 charge."

"I know dialaphone require you to purchase a top-up with every PAYG phone, but many people would factor this into the cost of a cheap handset, and in some cases it is still cheap enough to take a punt. However, the clause does not mention anything about topping up, it is only concerned with making a call. so if you put your topped up SIM away for future use, you would still get stung."

ANOTHER EDIT: We’ve heard from Dial-a-Phone - their said: “We’ve looked into this and can confirm that the matter is as a result of an admin error and was by no means intentional.

“The copy referenced an old process for connecting prepay which is no longer valid. We have not charged any customers for not using a SIM for at least a year. Accordingly, the wording will be amended shortly.

“It is important to us that our customers are completely happy with any purchases they make, and the terms and conditions connected to these, so it is unfortunate that on this occasion the service received fell short of our usual high standard.

“We’d genuinely like to thank BitterWallet for bringing this to our attention and apologise for any inconvenience caused”.


  • Darren
    that is a really sneaky way... surely there is not contractional agreement? If I was him I would just cancel the credit card and get a new one issued, that way they cant charge your card... that is a bit of badluck, I got some on order from O2, Ill be reading the T&C's closely on those.
  • Simeon
    I believe this is one you should punt to your local trading standards... especially the bit about Distance selling not applying! This is also an unfair term in the contract (i believe) I am not a lawyer. http://www.consumerdirect.gov.uk/before_you_buy/think_of/unfair-contracts#named2 An unfair term in a contract covered by the Unfair Terms in Consumer Contract Regulations (UTCCRs) is not binding on you. Test of fairness A term is unfair if: Contrary to the requirement of good faith it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of consumers. 'Good faith' means that traders must deal fairly and openly with you. Although standard terms may be drafted to protect commercial needs, they must also take account of your interests and rights by going no further than is necessary to protect those legitimate commercial interests.
  • Nobby
    No doubt someone, somewhere has bought 100 of them hoping to sell them at eBay / bootfairs. :-D
  • Dave S.
    If you're reading this dial-a-phone, you're a massive bunch of tossers, that's right, a massive bunch.
  • Dale A.
    Contoversial perhaps, but what about, upon receipt, putting the SIM into a mobile, adding a bit of credit, then making a phone call to someone, hence not falling foul of the £30 charge whatsoever? Yes, dialaphone's tactics are dubious to say the least but why the heck order two (not one) SIM cards if you have no intention to use them? If they are being sold to you for 1p each, postage included, then of course they are being subsidised in some way and someone will expect at least a bit of return on the sale. I mean, come on. Just buying something for 1p just because you can?! This is why this world is so f**ked up.
  • ssme
    @nobby, every cloud etc. the people who i worry for more are those who get simcards just on the off-chance they might need them one day, like when visitors from abroad need a short term number. i was lucky that i happened to glance at the ts&cs. i have considered trading standards, but what could they actually do? they're always very helpful but pretty toothless in my experience.
  • law d.
    Dialaphone are attempting to unilaterally change the contract terms "after the event" - basically, the £60 term will only be effective if it is notified to the customer at the time of the contract formation (i.e. at the time of placing the order). Accordingly, this provision will not be binding upon you and, if Dialaphone attempt to enforce it, you would be entitled to "kick up a stink" (technical term) and require repayment (no doyubt a hassle but legally the position). Hope this helps!
  • ssme
    yes, there is no way on earth i would have let them get away with it if i hadn't noticed in time. but i was not particularly bothered about the sims, so taking the refund on the postage seemed to be the easiest path. they've been sent back (and i'm 14p up on the postage - woohoo! ). i fully expect dialaphone to deny all knowledge of receiving them or something.
  • Sanity
    Wow - you get somthing for free (well almost) and the person who gave it to you wants somthing back for it - well how dare they - you lot make me sick - get a life...
  • Andy D.
    @Sanity Ha ha - wondered how long it would be before some spineless apologist came slithering along. Well done - you're actually about an hour later than I predicted.
  • Dave S.
    "Wow - you get somthing for free (well almost) and the person who gave it to you wants somthing back for it - well how dare they - you lot make me sick - get a life…" Yeah, but £30/SIM you wouldn't mind paying that? Get a life... tit-end.
  • ssme
    @sanity: i think if i got something for almost free, then i should be told whether they want something back for it BEFORE i've paid for it. it's almost like it's the law or something. i think bitterwallet should amend their terms and conditions after your post to state "Any user posting under the name Sanity agrees to pay Bitterwallet.com the sum of £50000 and deliver to us their offspring unto the seventh generation". they're allowing you to post, right? why can't they ask for something back after the event?
  • martyparty
    It would be kind of fun to pay the 1p by credit (not a debit card) (which would probably cost the dialaphone more than 1 p in charges) and then wait out the term get the charge and then complain about it to your credit card issuer. They would almost certainly side with you and get your money back for you. If this happened often enough Visa/MasterCArd would not be amused and complain to dialaphone's card processor for having too many chargebacks. At that point the 'complaint' would cost somebody somebody money (usually dialaphone unless their bank decide to swallow it but they are none to generous these days) and it would all get a bit nasty
  • bob
    ssme - I would cancel the card anyway... whats the betting now that you have sent them back you wont hear anything til they charge your card in two months time because they 'never got the sim cards back' and they 'have no record of you ever speaking to them'? I bet you will have to go through all this again.
  • ssme
    @bob, i think i might do that. it was my first thought. would the bank simply issue a new card with a different number though? i don't want to lose this card, it's too useful when i go abroad. they're still not tracked as delivered. i forgot royal mail are not the most reliable...
  • jinkssick
    nice little story and very worthy of being here. this is absolutely shocking, how they cud do that. yeh, cancel card saying you lost it, theyll just send another within 4-5 days with new card number but from same account. best bet.
  • Degeneratemoo
    You have to be careful about cancelling credit cards to avoid payment of bills, Barclay card apparently just apply any contractual requests for payment to a holding account that you are still liable for. My FIL had this issue with a broadband provider, they were taking money even though the service was not being provided and they would not cancel it because he was in a contract. Having spoke to BC they said you can cancel your card if you like but we'll just put the money in a holding account and you'll still be liable for it. No win either way!
  • free 4.
    Law Talking Dude is right, the term doesn't apply to the contract, I think the case is Marlborough V Olley Court Hotels from memory. Also the Distance Selling Regs will apply, so you have at least 7 days to return it (though they can make you pay the post if you return it under these, but not the above) and possibly longer but I won't go into that. But at the end of the day that is your legal position, would you ever go to court over it? Nope! Just contact trading standards and/or newspapers etc to drum up bad press instead.
  • Dialafraud
    Not only are they breaking the DSR, but the dickheads are also breaking the Unfair Terms in Consumer Contracts Regulations 1999!
  • ssme
    a few things I forgot to mention (as i get increasingly grumpy that my return doesn't seem to have been signed for yet): 1. dialaphone still have not changed their online terms and conditions. 2. andy's final paragraph is a little misleading. as far as i can tell, the printed ts&cs apply to ALL PAYG products, not just cheap SIM cards. so if you already have a SIM and fancy a new phone, if you take delivery and stick the SIM in a drawer, you will still be liable for the £30 charge. i know dialaphone require you to purchase a top-up with every PAYG phone, but many people would factor this into the cost of a cheap handset, and in some cases it is still cheap enough to take a punt. however, the clause does not mention anything about topping up, it is only concerned with making a call. so if you put your topped up SIM away for future use, you would still get stung. 3. even after they had agreed to take the return, they still did not acknowledge the DSR. they simply repeated "under the circumstances we're willing to allow you to return the SIMs". 4. i really wish i hadn't listened to their advice about sending them back recorded delivery :-( 5. dialaphone claimed something along the lines of "most networks impose a charge if a PAYG SIM isn't used within a certain period". 6. dialaphone didn't explain why (as claimed in the clause) a SIM card available free around the internet requires a £30 subsidy to allow them to sell it for 1p. 5. dialaphone have the worst automated call routing service in history.
  • Darren
    @SSME - You can change your card, just explain that you think someone copied your card, they dont cancel it, they just re-issue it with a new long number. I was subject to a bizzare online fraud with my card (they where putting money on my card???) and the Bank Manager just said that we can change the number rather than cancel and re-issue. I still get hit with the bizzare fraud every month... but thats another story!
  • ssme
    dialaphone's edit does not explain why the customer service representative confirmed to me that i would be charged £30 for each SIM automatically, or the fact that she delayed calling me back for several hours while she confirmed with management that i would indeed be charged. there is no explanation for this. if they are so eager to ensure customers are pleased with their purchase, why could they simply not get this information straight? surely it would be in their interest for me to keep the SIMS rather than send them back? also, the explanation does not address the issue of attempting to sidestep the Distance Selling Regulations.
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