T-Mobile Termination fee - £801.71!!!

Centaur

Hi All,

I took out a contract for 3 phone lines with T-Mobile in 2009. (1 for myself and 2 for my children). Shortly thereafter, my wife & I split up and I moved out. I subsequently lost my job at the end of 2009 and contacted T-Mobile. They advised that I had a balance of £559.76 to repay and so I entered into an agreement to pay £10 per month, which I adhered to without default.

I am now in a position to repay the balance of £289.76 and when I contacted their debt management company this morning, I have been advised that my balance outstanding is now £1091.47 ...due to T-Mobile adding £801.71 in termination fees in April 2011.

I have not been advised of these fees and had previously asked that the account be frozen and closed in January 2010.

These termination fees are outrageous and there is no way I can either settle them now or ever repay them based on the current £10 monthly arrangement (we're looking at another 110 months - i.e. over 9 years!). Has anyone any experiences of this - or any suggestions as to how I can tackle this situation? The debt management company are very understanding but can only suggest that I direct any 'negotiations' towards T-Mobile.

Many thanks everyone

smartphone

Hi Centaur. Obvious question first up, do you have any record of the agreement to terminate the contract in January 2010? You also need to find out why the termination fee is so high - this is usually due to there being outstanding time on the contract, which suggests somewhere along the line, your contract has been extended. I think you need to establish this information before you can take the next steps to resolving. Best of luck.

macman

An account can't be 'frozen'. If you close the account while still in your minimum term then the full amount owing on the contract will be payable (any stage payment of that sum that might be agreed is another matter).
How long was the minimum term contract and when precisely was it taken out (you just said '2009')?
If not closed, the the account will continue to run until you give your 30 days notice.
The 'termination fees' are simply the balance owing on the contract had it run to the end of the minimum term, so it's always pointless ending a contract early-you may as well use the phone to get something back for your money.

grumbler

Centaur wrote: »

I have not been advised of these fees and had previously asked that the account be frozen and closed in January 2010.

If the minimum term is not over you cannot have the accounts frozen and closed for free. The amount you owe for the remaining months (early termination fee) gets added to the current balance.

Centaur

Thanks for the quick responses everyone. Your replies have certainly given me some further clarity and insight. :T

After a very nasty divorce, I have no paperwork other than my letter to the Debt Management Company in January 2010 and subsequent notes of phone calls and repayment "agreements".

I do recall that the contract was for 24 months and so would have expired in March 2011. If I assume that the £801.71 termination fee is in respect of the contract from April 2009 to April 2011, then I calculate that this comes in at approx £35 month for 24 months - which appears reasonable.

Therefore, my follow-up to this must be... what on earth was the £559.76 "balance to pay" when the account defaulted in January 2010? - if they are also claiming a termination fee. There's no way that I could have run up this much cost in excess of any contracted minutes/texts/data allowances over a 9 month period.

Obviously, I now can't even access old joint Bank accounts to ascertain how much was repaid over the months by direct debit - but assume the account was managed appropriately, so £35 x 9 months = £315.

Applying this to the the £35 x 24 months (£840) leaves an unpaid balance of £525 - close to the £559.76 originally quoted by the debt managers. Therefore, I suggest that T-Mobile has (automatically) renewed my contract for a further 24 months from April 2011 (but then why terminate it straight away?)

All hypotheticial until I can speak directly to T-Mobile but I can't currently get past their automated Customer Services Helpline as I no longer have my old (or any!) T-Mobile number to enter onto their system (and the blighters hang up after 3 silences!)

grumbler

I think nobody hear will be able to explain this. If some "Debt Management Company" claims that you owe them something they have to prove this with some documents like, say bills.

Buzby

Figures can be plucked out the air, and who do you think pays for the management company to administer the payment trickle? Certainly not T-Mobile, who will have been paid a modest fee for your debit and the rest is what the debt recovery company can squeeze out of you. You arrangement to pay off was - if anything - nothing to do with the original amount owed, but what the firm could massage into getting you to pay.

Even if you stopped paying them there chances of you being pursued through the courts is minimal (if at all). Just be prepared for them to sell it on to some other firm if you stop.

I would check your credit file though, untold damage can occur so it might be useful to have a heads up and see whats there if you haven't done so already.

Centaur

...back to the drawing board.

T-Mobile were useless, telling me that they have no record of me ever having a contract phone! Spoke with the very helpful Debt Management Company who tells me that my account with them is "ambiguous" with regards to totals outstanding. He is referring it back to T-Mobile for clarification.

Who'd have thought that repaying debt would be so difficult? It's not like I'm ignoring them and putting my head in the sand!

...and yes Buzby, T-Mobile have already impacted on my Credit File with Experian.

Many thanks for everyone's input :beer:

grumbler

Ask experts at Debt-Free Wannabe board. They know how to deal with "Debt Management Companies".