T-Mobile price hike due November 2013 - Ofcom statement lets you cancel

anna2007

Ofcom issued a statement on Wednesday, with their decision on the consultation re price rises in fixed term contracts. The main gist of this is that Ofcom will issue new guidance on the relevant regulations (General Condition 9.6), which will apply to all new contracts from 23 January 2014, where any increase in the "core subscription price", the monthly charge, will be seen as of material detriment and therefore allow the customer to cancel the contract penalty-free.

GC9.6 already allows customers to exit their contracts penalty-free if any modifications, such as price increases, are of "material detriment". The problem has always been that it was unclear what was meant by material detriment - now that Ofcom have stated that any increase in the "core subscription price" is materially detrimental, existing customers, not just customers from 23 January 2014, should be able to use this to cancel without penalty, if hit with a price increase.

The GC itself isn't being changed, Ofcom are instead issuing guidance on the GC in 3 months' time, which will then automatically apply to all new contracts. For existing contracts, Ofcom have stated:

"GC9.6 will continue to apply as it does now. Any question regarding whether a price increase meets the material detriment requirement will be considered on a case by case basis".

Ofcom's closing comment in their statement is that they will be monitoring providers' compliance with the GC in all cases, i.e. for both new and existing customers.

Some T-Mobile customers, myself included, who took their contracts out between December (possibly November) 2012 and May 2013 received notice of the price increase in April/May, however this isn't due to come into effect until next month. The TM terms and conditions 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 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".

TM obviously 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!

I know that TM have been applying the increase in a ridiculously convoluted way since May, by applying a charge and credit to these customers' accounts (which seems a questionable way to go about things in itself), but I don't think this in any way represents the actual price increase - the price these customers are paying won't actually increase until next month, which gives time to cancel under the terms.

Earthworm

Have you had this checked over or are you qualified to confirm this is 100% accurate? If this could apply to price increases currently in the pipeline why would they specify a date?

I am also a little bit unsure on the point in which legally the price increase has or will commence given that the tariff price has now increased and T-Mobile have then applied temporary credits to offset that increase based on when the minimum term was agreed.

robbies_gal

thought it was only for new contracts

anna2007

Earthworm wrote: »

Have you had this checked over or are you qualified to confirm this is 100% accurate? If this could apply to price increases currently in the pipeline why would they specify a date?

I am also a little bit unsure on the point in which legally the price increase has or will commence given that the tariff price has now increased and T-Mobile have then applied temporary credits to offset that increase based on when the minimum term was agreed.

No, not checked over by my legal team, and I can't give a 100% guarantee (I didn't promise a result!). But I did take on T-Mobile, through CISAS, over the May price increase and won.

The significant point from the Ofcom statement is that they've now given a definition of material detriment - if you read through all the waffle, this is the only thing that's really changed, statement here:

http://stakeholders.ofcom.org.uk/consultations/price-rises-fixed-contracts/statement

I know that Ofcom have said that their guidance will come into effect in January, but that doesn't change the fact that they have now defined 'material detriment' - it's out there and can be applied to current contracts, as well as ones post-January. They've also stated that they'll monitor compliance with the GC in all cases, i.e. new and existing.

I get your point about the temporary charge/credit situation, but do you think a court would see that as an acceptable way to impose a price increase? It's confusing, convoluted and, at worst, downright sneaky. It most definitely flies in the face of all the consumer protection legislation. I've every faith that the ADR scheme (and certainly a court) would view it in the same way.

Have a look at the wording in the T-Mobile t&c's - IMO you can escape your contract due to the November increase. Remember that the legislation favours the consumer if there's any doubt!

If TM refuse to let you cancel, raise a formal complaint so that you can take it to CISAS. The complaint should be not only for breach of contract, but also breach of GC9.6. Copy Ofcom into the complaint too.

Of course, there is no guarantee that a CISAS claim would be successful, but if my TM contract hadn't already been cancelled by the adjudicator, I'd be raising a complaint on the above grounds. If you argue your case well, there's every chance of winning. And if you lose, it's cost TM far more in adjudication costs than they've gained from your price increase.

thecoldstreamer_2

What price increase where are you hearing this information? You are talking utter rubbish

anna2007

thecoldstreamer wrote: »

What price increase where are you hearing this information? You are talking utter rubbish

Erm, from T-Mobile?

http://www.t-mobile.co.uk/price-changes/

Under Frequently Asked Questions:
Why are some customers affected and not others?

The majority of our customers are affected by this change. However, if you recently joined or upgraded with T-Mobile the increase will be delayed until November 2013.

And you work for T-Mobile? That explains the polite, courteous and well informed tone of your post...

thecoldstreamer_2

anna2007 wrote: »

Erm, from T-Mobile?

http://www.t-mobile.co.uk/price-changes/

Under Frequently Asked Questions:
Why are some customers affected and not others?

The majority of our customers are affected by this change. However, if you recently joined or upgraded with T-Mobile the increase will be delayed until November 2013.

And you work for T-Mobile? That explains the polite, courteous and well informed tone of your post...

Tmobile may change prices just like all suppliers, however ofcoms ruling doesn't come into force until 1st January that's at least what it stated on my system today. So expect price increases before then.

If you don't like it leave but don't whinge about it on here, besides sky puts prices up all the time but nothing about them on here

digp

which t-mobile contracts are affected, we have had no notice??

thecoldstreamer_2

There are no plans to change prices. They are still banging on about price changes earlier in the year that's old hat and all the other providers increased their plans too

anna2007

digp wrote: »

which t-mobile contracts are affected, we have had no notice??

New contracts and upgrades taken out between December 2012 and May 2013. If you are affected, you should have received a letter or text in April/May saying your price plan charge would be increasing, but that the increase would be delayed until November.

The only thing changing on 23 January 2014 is that Ofcom will issue new guidance, giving clarification on the regulations that already exist (General Condition 9.6), and this guidance will apply to new contracts taken out from this date.

anna2007

An update for anyone affected by next month's price increase - another forum member received an email from Ofcom yesterday, confirming that T-Mobile will be cancelling the price increase for customers who joined TM after 31/10/12, in light of the Ofcom decision last week, and TM will write to all affected customers in due course.

Ofcom also stated that they had written to TM reminding them of their obligations under GC9.6. They also said that they expect ALL Communications Providers, not just TM, to change their practices in line with the Ofcom statement of the 23rd... which does sound like no price increase will be allowed from that date forward, i.e. existing customers are protected too.