Right to Cancel when service not available on new address

Fosterdog

Cornucopia wrote: »

In my case it is an 18 month contract. I appreciate the companies have service startup costs. But at the same time, a certain proportion of the population WILL move in an 18 month period.

The question for me is not whether there should be *some* charge, but whether the charge is excessive/doesn't reflect the costs of the service provider.

But what would you class as excessive?

In your case TalkTalk don't own the exchange (they don't own any)so they will be leasing your port off BT OpenReach, they may have had to sign in for a minimum term to be able to provide you with the service. They don't do the initial setup themselves but have to pay OpenReach to do it for them, they will have a maintenance contract on your line to minimise disruption to your service if there is a fault.

They then provide you with the free equipment to use to receive your broadband. They have their own overheads for staffing call centres etc. that has to be paid for somehow, without them TalkTalk don't exist so you you have no broadband in the first place.

Broadband companies don't make much if any profit during your minimum term, because of the initial outlay to them, it is the ongoing monthly contracts that even make it worth it to them to be in business which is why you can often get offers and discounts after the minimum term as an incentive to stay with them.

OlliesDad

Cornucopia wrote: »

I suspect OFCOM will see it otherwise.

The guidance offered by Ofcom some years ago was as follows:

Ofcom wrote:

• Providers must make the length of contracts clear, as well as the costs involved if a consumer chooses to break a deal.
  
• Subsequent contract periods should not be imposed unless there is a clear benefit to the consumer and cost to the provider.
  
• A consumer who ends a contract early should never have to pay more than the payments left under the contract period – in fact they should often pay less than this, to reflect costs providers save because the contract ends early and their ability to recoup sums by selling services to other consumers.

I don't see how this disagrees with what Virgin are offering.

Cornucopia

Fosterdog wrote: »

But what would you class as excessive?

I wouldn't want to be paying much more than 2x monthly payment.

In your case TalkTalk don't own the exchange (they don't own any)so they will be leasing your port off BT OpenReach, they may have had to sign in for a minimum term to be able to provide you with the service. They don't do the initial setup themselves but have to pay OpenReach to do it for them, they will have a maintenance contract on your line to minimise disruption to your service if there is a fault.

They then provide you with the free equipment to use to receive your broadband. They have their own overheads for staffing call centres etc. that has to be paid for somehow, without them TalkTalk don't exist so you you have no broadband in the first place.

Broadband companies don't make much if any profit during your minimum term, because of the initial outlay to them, it is the ongoing monthly contracts that even make it worth it to them to be in business which is why you can often get offers and discounts after the minimum term as an incentive to stay with them.

My heart bleeds for them.

If it's not profitable for them to offer service on the not unreasonable basis that some of their customers might need to move home during the contract period, then we have a problem.

Cornucopia

OlliesDad wrote: »

The guidance offered by Ofcom some years ago was as follows:

I don't see how this disagrees with what Virgin are offering.

Because that is about voluntary cancellation, not forced cancellation.

tinkerbell28

Cornucopia wrote: »

Because that is about voluntary cancellation, not forced cancellation.

No it isn't. It is about cancellation full stop. If you are told to move house. Yes your hand is forced, but not by Virgin.

This has been the case for years. I'm sure it it could be successfully challenged it would have done by now.

smalltimepro

jacques_chirac wrote: »

It would only be 60-70% of the contract if you chose to terminate it very early in the year. If you terminated it with a short time left, you would only pay a small amount. This is a fair way of calculating the fee.

As long as it is not the service provider that forces you to move, there is nothing unfair in them enforcing their contractual rights. And you would be surprised how many people do move for the fun of it!

I meant 60-70% of the cost per month multiplied by remaining months on the contract. Sorry for being ambiguous on that. I agree that it is a fair way of calculating if you terminate of your own accord. However I still feel that it is unfair if the provider is unable to provide the service at the new address.

Again I agree that the enforcement of contractual right is not an unfair act in itself. My point is that, it is the conditions in the contract (in the case described above) which is unfair.

Utilities provided at residences (gas, elec, water) are normally locked to an address, and so if you do a minimum period contract with any such utility provider, the contract remains on the residence and not on you (in case you move during that period). This is enforced through regulation. On the other end of the spectrum mobile service providers give a contract on the person regardless of where he moves to. Broadband providers are using best of both kinds in there favour. They are locking the contract on the combination of the person and the address. This in itself is a bias that can rightly be viewed as unfair. i.e. favouring one party of the contract.

I am arguing that ofcom must step in to stop providers from penalising consumers when they cannot continue the service on a new address.

A fairer way in my opinion would be a reasonable fixed charge instead of multiplying by amount of remaining months. This charge should ideally be the same as cease/termination charge usually around £25-30.

smalltimepro

OlliesDad wrote: »

I don't see how this disagrees with what Virgin are offering.

Indeed it does not. Which is why I am campaigning/asking for Ofcom to have an additional clause that addresses scenarios where contract has to be terminated early due to person moving address and provider not able to continue service at new address.

Fosterdog

smalltimepro wrote: »

Indeed it does not. Which is why I am campaigning/asking for Ofcom to have an additional clause that addresses scenarios where contract has to be terminated early due to person moving address and provider not able to continue service at new address.

But what about mitigating losses? Why can't you choose to move to another address that they can provide the service on? You are the one breaking the contract so they don't have to offer anything. The fact that they do remove/reduce fees if they can supply you in your new property is above what they have to do.

jacques_chirac

Cornucopia wrote: »

I'm about to move and suspect I may fact the same problem. If this happens, and the fees are excessive, I will be complaining to OFCOM.

It's quite clear that people will move, and that whilst the technology remains incomplete across the country, that people may not be able to continue with their present service whether they want to or not. Under those circumstances, charging hefty termination fees is probably unfair. I will be quite happy to return the company's equipment.

In contract terms, the Company would no doubt call this "Force Majeure". I see it as the same thing for the Customer.

If it is quite clear that people will move, those people should take this into account when entering into contracts. Surely you don't need someone to think for you?

tinkerbell28

Some utility plans are tied to people and carry a cancellation fee.

The thing is with tv/phone/net. Most companies don't own the infrastructure. So not only are they paying for equipment, they are paying a fixed rental for x amount of time on the line, exchange, maintenance, etc. Hence minimum contracts.

Mobiles is totally different as the service can be provided wherever.

The thing is, things like this HAVE been challenged in times past. When it became apparent how much military personnel were being stiffed every time they moved.

Mobile companies were given new guidelines about how to terminate/postpone contracts upon a posting order, until return.

The utilities/tv's do no such thing. So when you're forced out the govt will pay an allowance to buy you out of contracts as they've moved you. It's all in the covenant.

So I'm pretty damn sure if the govt have to fork out to cover it for their employees then there won't be an about turn anytime soon.

You learn with time. I learnt quite a few years ago now, to never use virgin for this reason, their coverage is awful. I've only ever lived in one place where virgin was an option. I left and had to buy out of the contract. So wouldn't do it again.