Tmobile price increase

Chimper

Originally Posted by Chimper
I agree. It appears that Ofcom has defined "material detriment" so there can be no argument. All previous increases will have caused material detriment and you should be free to leave. A definition of a term can't just apply to the future use of that term.

RandomCurve wrote: »

But the contract says you only have 30 days from when they tell you to request termination - and that is long gone.

I was thinking that if anyone had tried to get out of their contract due to material detriment within the termination time, but had it refused. Without going back over the posts I seem to remember that there were some who had claimed this.

anna2007

Chimper wrote: »

I was thinking that if anyone had tried to get out of their contract due to material detriment within the termination time, but had it refused. Without going back over the posts I seem to remember that there were some who had claimed this.

I remember a few too - who were usually told not to bother with the material detriment route due to difficulty in proving it - obviously not the case now that Ofcom have given a definition.

I agree that anyone who tried to cancel during the 30 day notice period due to material detriment has a good case - and (if I remember right) they have 9 months from the date of first complaint to take it to CISAS?

For anyone else, the problem will be that TM will claim they had no guidance at that time on what constituted material detriment and I assume they'd use this as a defence.

Some customers, myself included, who took their contracts out between December (possibly November) 2012 and May 2013 received notice of the price increase in April, however this isn't due to come into effect until next month (not sure of the reasoning behind the deferment, but possibly the legality of imposing an RPI-based increase on new contracts). The t&c's state that a cancellation charge won't apply if:

"7.2.3.2. You are a Consumer and the change that 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"

As the change doesn't actually come into effect for these customers until next month, if people give notice to TM now to cancel their contracts as per 7.2.3.2 above (and with Ofcom's definition of material detriment as supporting evidence), then there's a chance to make a good case to CISAS when TM refuse to cancel the contract.

Also, 7.1.4 states:
"We can increase any Price Plan Charge. We will give You Written Notice 30 days before We do so. The change will then apply to You once that notice has run out".

I would argue that TM haven't given notice in accordance with the t&c's - giving notice 6 months before they increase the price plan charge clearly doesn't equate to 30 days before!

RandomCurve

I think TM will try and wriggle out of it as they have applied the price rise from May 9th, but have out of the kindness of their heart credited back the increase until November - that was their way of circumventing any Ofcom ruling which was expected in June.

You could argue that they can't credit back sums they have not taken and therefore they have not actually implement the rise, other than for their own administrative purposes - which has nothing to do with your contract.

The other option is to challenge TM to explain why they have not applied the rise until November. As I can see it they can only answer:

1. To avoid Ofcom ruling - which they can't say (there again Ofcom are so soft they probably can say it)
2. Because the Jan/Feb/Mar RPI can't be applied to a contract so new (in which case it is the wrong rate)
3. That they are just nice guys and gals (then why not defer for everyone)?

I think this could boil down to UTCCRs strict legal definitions or fair interpretation - and I think their is a good chance TM would lose.

RandomCurve

No surprises here !!!

http://www.mobilenewscwp.co.uk/2013/09/27/t-mobile-and-orange-garner-most-customer-complaints-to-ofcom/

RandomCurve

Colour key below:
Red - my narrative
Blue - OFT Unfair terms in Consumer Contracts Regulations 1999 (UTCCRs) I've Bolded the important bits
Black - quotes from EEs Annual Accounts o December 31st 2012 and 1st Quarter update 2013

I think anybody on a Pre Oct 2012 contract who never requested cancellation can still have the price rise cancelled under the UTCCRs by proving that TM costs have not increased by RPI (in fact they have fallen), have applied RPI with out regard to their actual cost increases and under the UTTCCRs suppliers a deemed to be able to forecast and control cost better than consumers therefore in a contract as short as 24 months it is UNFAIR to have a price rise clause at all.

The OFT guidance on the UTTCRS states:

12.1 The OFT's objections to variation clauses generally are set out under Group 10. If a contract is to be considered balanced, each party should be sure of getting what they were promised in exchange for providing the 'consideration' they agreed to provide. A clause allowing the supplier to increase the price – varying the most important of all of the consumer'scontractual obligations – has clear potential for unfairness.

TM will argue that they are allowed to increase prices in line with costs as they have linked the price rise to inflation and indeed the OFT guidance does state (12.4):

12.4 A degree of flexibility in pricing may be achieved fairly in the following ways.30

• Where the level and timing of any price increases are specified (within narrow limits if not precisely) they effectively form part of the agreed price. As such they are acceptable, provided the details are clearly and adequately drawn to the consumer's attention.

• Terms which permit increases linked to a relevant published price index such as the RPI are likely to be acceptable, as paragraph 2 of Schedule 2 to the Regulations indicates, subject to the same proviso.

• Any kind of variation clause may in principle be fair if consumers are free to escape its effects by ending the contract. To be genuinely free to cancel, they must not be left worse off for having entered the contract, whether by experiencing financial loss (for example, forfeiture of a prepayment) or serious inconvenience, or any other adverse consequences.31

But the OFT also states that (12.3 is the important bit)

12.2 Any purely discretionary right to set or vary a price after the consumer has become bound to pay is obviously objectionable. That applies particularly to terms allowing the supplier to charge a price on delivery ofgoods that is not what was quoted to the consumer when the order was placed. It also applies to rights to increase payments under continuing contracts where consumers are 'captive' – that is, they have no penalty-free right to cancel.

12.3 A price variation clause is not necessarily fair just because it is not discretionary – for example, a right to increase prices to cover increased costs experienced by the supplier. Suppliers are much better able to anticipate and control changes in their own costs than consumers can possibly be. In any case, such a clause is particularly open to abuse, because consumers can have no reasonable certainty that the increases imposed on them actually match net cost increases


And you can prove that TM have not even attempted to reflect their costs increases (i.e have abused their right to link increases to RPI) and are simply adding to the bottom line as follows:

1 TM state that they ANTICIPATED the March RPI rate, but if they are trying to cover real cost increases they would have calculated what their cost increase has been and then capped the rise to the LOWER of the real cost increase or RPI – the fact that they ANTICIPATED RPI proves that they have taken no account of their own cost increases and therefore the price rise is UNENFORCABLE

2 TMs accounts for the year ended 31st December 2013 clearly state that costs have DECREASED and profit margins increased because of this:

We reduced indirect costs by 3.1% yoy. We achieved an annual run rate of £369m in gross opex savings or 83% of the £445m annual run rate goal and are on track for £3.5bn+ NPV in synergy savings by 2014.

This has improved our full year adjusted EBITDA margin to 21.2%, with H2 adjusted EBITDA margin reaching 22.0%.

3 EEs first quarter results clearly show that they are treating the pricerise as a REVENUE ENHANCEMENT and not a way of covering increased costs:

Initiatives

–Introduced postpaid RPI price adjustments
–Launched competitive prepaidoffers in April that more effectively monetise data (T-Mobile Smart Packs and enhanced Orange Dolphin)
–Further extended 4G smartphone range

As you can see it makes no reference to increased costs!

I am preparing a case in relation to an Orange contract which applies the same logic and will post a link to that once it is ready

RandomCurve

I have written a full version of a template letter for people to send to T-Mobile (and Orange) to claim back the price rise sums. However in the further research I have carried out I'm sure that I can prove hat ALL mobile phone operators price rise clauses (however they are worded) breach the Unfair Terms in Consumer Contracts Regulations 1999 EVEN IF you were made fully aware of their existence when you entered into the contract.

I still need to check my facts out - and "discuss" with OFCOM - so I will delay up loading the letter for now.

RandomCurve

A major break through for al T-Mobile customers on Version 59 of the contract.

You should shortly be receiving a communication from EE cancelling your price rise - pressure on Ofcom is finally paying off :j

Unfortunately Ofcom don't seem to have the backbone to ask EE to do the same for V58 contract holders so I fear Ofcoms INVESTIGATION was actually a NEGOTIATION - to ensure the result was of least harm to T-M!!!

I will be starting a new thread detailing how I believe EVERYONE can have the price rise refunded soon.

For now lets celebrate a small victory:dance: - and spare a thought for silent Swantee :wave:

Humble in victory as ever - RC

RandomCurve

Ok enough celebrating!

I have now started the ball rolling in seeking permission from my MP to ask the Parliamentary Ombudsman to review Ofcom's handling (inactivity) of the T-Mobile price rise. In the hope that Ofcom will grow some backbone and direct EE to cancel all of the TM May 9th prices rises for both versions of the contract.

I am also seeking that the review includes Ofcom explaining why it has not sought a court review on the enforceability of all past rises on all phone contracts (Mobile and fixed from all operators) where the contract length is less than 24 months. In order that the court can rule them unenforceable and therefore refundable! I've already won a case against Orange that proves the price rise clauses are unenforceable!

RandomCurve

Can someone on V59 of the contract who receives the price rise cancellation letter from T-Mobile post it here? I am interested to see what reason they use for cancelling.

Also make sure you are contacted if you are on V59. V59 of the T-Mobile contract came into force for contracts taken out after 30 October 2012 see here:
http://www.t-mobile.co.uk/shop/terms-and-conditions/terms/?WT.mc_id=ON_MEC_A_AffWin_Skimbit&WT.tsrc=Affiliate&awc=3519_1369609866_e94adc598a1a05b9e6f3620931967c0c

I know in my case (I took my contract out in Mid December 2012) and several others T-Mobile systems had me recorded as being on V58 instead of V59.

If you don't hear from T-Mobile then contact them and insist you are on V59 (the adjudicator in my case said "....having taken out a contract after their publication it is wholly reasonable for the customer to believe it is to version V59 of the Terms to which he is bound.")

RandomCurve

I've finally got around to creating a new thread to detail how everyone should be able to get a refund of sums taken on price rise clauses.

https://forums.moneysavingexpert.com/discussion/comment/63754559#Comment_63754559