Home broadband - massive termination fee

charles44944

My girlfriend just moved in with me, so now we have two contracts for broadband Internet + TV + phone. We'd like to cancel hers (with talktalk).

Unfortunately her contract has 17 of 18 months remaining, so we expected and were willing to pay a large termination fee.

However, the termination fee was still larger than we expected---£450. They explained that the fee is calculated at £200 for the TV box plus an ETC of £15/month remaining on the contract.

I asked the customer service rep what would happen for a contract with only 1 month remaining, and he said, yup, the termination fee would be £215.

The cost for our contract is £30/month, so it would only cost us £510 to keep the service for the full term. A £450 termination fee seems disproportionate to me.

For fun I ran some numbers and found that once you have 13 months or less remaining on this contract, the termination fee is higher than the cost to continue the contract to term.

I've been reading some things on the Ofcom website that seem to suggest that they would take a dim view of an ETC policy in which the fee is larger than the contract remaining.

But I can't tell for sure what my rights are. Can you help? What arguments do I have, if any, the next time that I talk to them?

[Sorry for length...]

bod1467

https://forums.moneysavingexpert.com/discussion/comment/61548209#Comment_61548209

Original thread in Internet Access. I suggested posting here as the folks who frequent this board may have more contract knowledge.

ValHaller

charles44944 wrote: »

I've been reading some things on the Ofcom website that seem to suggest that they would take a dim view of an ETC policy in which the fee is larger than the contract remaining.

Can you give us something of a link?

As a newbie, you won't be able to do a clickable link, but you should be able to give enough to get us to the page.

charles44944

ValHaller wrote: »

Can you give us something of a link?

As a newbie, you won't be able to do a clickable link, but you should be able to give enough to get us to the page.

Oh yes, of course, I hadn't thought of an indirect link. Let's see if this works.

The URL is the standard http: thing put in front of:

//stakeholders.ofcom.org.uk/binaries/consultations/addcharges/statement/addchargestatement.pdf

On page 5 there's a discussion of ETCs. It says:

We consider that an ETC is likely to be fair where:
- the terms providing for it are transparent at the point of sale with sufficient prominence that the consumer is fully aware of the consequences of terminating early, and what the level of the ETC would be;
- it is never greater than the amount of the (usually monthly) contractual retail payments remaining due at the date of termination;
- it also takes account of any costs associated with the provision of the service which will no longer be incurred by the supplier, including any:
- variable costs which can be avoided; and
- costs of shared network elements which the consumer is no longer using, and which can be used to provide services to another consumer (whether a new customer or increased demand from an existing customer); and
- it reflects any ability of the supplier to reduce its loss by ‘reselling’ the service to a new consumer; and
- it makes allowance for the supplier’s accelerated receipt of any sums.

Although I think the first bullet point (transparency) is likely to be met here, it is hard for me to see that any of the other ones would be met.

Of course, I don't know if the quoted guidance actually applies in my case.

bod1467 wrote: »

Original thread in Internet Access. I suggested posting here as the folks who frequent this board may have more contract knowledge.

Thanks for the link!

Quentin

You are being asked to pay less than you would be paying if you see out the minimum term, not more!

Check the contract ts + cs regarding early termination and if they are not sticking to the agreement you can complain but if not then little you can do but stump up.

charles44944

Quentin wrote: »

You are being asked to pay less than you would be paying if you see out the minimum term, not more!

Indeed. But the savings compared to the contract terms is only £4/month.

My argument would be the following. I'm happy to hear if this argument isn't convincing.

1. It is hard for me to see that this amount "takes account of any costs associated with the provision of the service which will no longer be incurred" --- it only costs them £4/month to offer the service? --- nor that it reflects "the ability of the supplier to reduce its loss by ‘reselling’ the service to a new consumer".

2. In months 5-18 of the contract the ETC is greater than the remaining monthly payments. This strongly suggests to me that the ETC policy was not designed with the above two points in mind.

wealdroam

Charles, you seem to be lumping together the Early termination Charge and the purchase of the box.

Paragraph 6.10 of Talktalk's T&Cs say:

6.10 If you receive a Set Top Box from us at no charge or a reduced charge and subsequently cancel the Tariff Plan with your TV Service before the end of any applicable Minimum Term then, in addition to any fee payable for early termination of your Tariff Plan in accordance with clause 11 below, we will also charge you the cost of the Set Top Box as set out on our Website less any amount you paid at the time you ordered the TV Service.

Their early termination charges are detailed in their help pages.

As you have tv, phone and internet, is it this clause that is applicable:

If you are a phone and broadband customer on the Plus or Plus TV package you will be charged £15.50 for every month left on your contract.

So in summary, the total charge is £15.50 per month remaining plus £200 for the box.

So reducing the monthly charge by nearly half for the remaining months doesn't look to bad to me.

A question:
Did you receive "a Set Top Box from them at no charge or a reduced charge"?

They also state in their promotional material:

£200 charge applies for your YouView TV box if you leave in your minimum term.

Now, whether those charges are fair or not, I'll leave for others.

Valli

What would be the cost of terminating YOUR contract?

pinkshoes

Why did your GF sign up to an 18 month contract if you were thinking of moving in together??

bod1467

Valli wrote: »

What would be the cost of terminating YOUR contract?

A reasonable question, although it would mean the GF would need to transfer (home move) her contract - assuming TT is available at his address.

pinkshoes wrote: »

Why did your GF sign up to an 18 month contract if you were thinking of moving in together??

A very good question - I can't believe the GF moving in was a spur-of -the moment decision. Was she coerced into a new contract, thinking that because her previous contract expired she HAD to take out a new contract? (Any such contract is a MINIMUM TERM contract. Once the minimum term expires it reverts to a standard monthly rolling contract).

ihateyes

charles44944 wrote: »

Indeed. But the savings compared to the contract terms is only £4/month.

My argument would be the following. I'm happy to hear if this argument isn't convincing.

1. It is hard for me to see that this amount "takes account of any costs associated with the provision of the service which will no longer be incurred" --- it only costs them £4/month to offer the service? --- nor that it reflects "the ability of the supplier to reduce its loss by ‘reselling’ the service to a new consumer".

2. In months 5-18 of the contract the ETC is greater than the remaining monthly payments. This strongly suggests to me that the ETC policy was not designed with the above two points in mind.

Look at the cancellation policy in terms of moving out.
Some companies have different cancellations policies.
one for just a straight forward cancellation, and the other for homemoves.

Are they aware she is cancelling because of a housemove?