Mobile Phone Contract - Price Rise Refunds

Mikmonken

rockstarzzz wrote: »

No definitely not. Only 77% out of 50-60 odd of us have got their money back. There are at least about 50,000 times this number of customers who have silently accepted the hike and the company is still minting money.

What i'd love to happen from this is obviously my contracts being cancelled and back dated along with everyone else's who hasn't been successful, but for OFCOM or whoever to enforce them to refund all price rises charged so far

RandomCurve

A claim for the Ombudsman Service (OS) - Vodafone.

This will be in THREE posts

I have not used the above service before (EE use CISAS) and having looked at the OS website they operate in a different way to CISAS in that it seems they rely on telephone conversations as well as written evidence. I am assuming the above will fit into whatever on-line form they have, but if not there should be a way to add attachments in which case simply copy and paste the first three paragraphs under the heading "compliant" and then put - "see attached for full details". It will be best to also attach copies of all the correspondence that you have had with Voda
Please amend the below to fit your circumstances:

• Red text – enter dates etc.
• Green Text - keep only if you had previous price rises applied to your Vodafone account and you want the increases refunded!
• Blue text – only keep if your last email sates something along the lines of “we consider this matter closed” or we won’t respond to further communications, if you actually have a deadlock letter then you can delete the blue text.
• If you have neither a deadlock email nor an email as described above please let me know – as I will need to compose a further email for you.

Accompanying email:
Vodafone have given me permission to bring this case to The Ombudsman as per their email dated X. As the email effectively confirms that Vodafone will not seek a resolution to this dispute then under the scheme rules as there is now no realistic opportunity to resolve this dispute without third party intervention I am entitled to bring a claim via The Ombudsman Service.
I have checked with the Ofcom Customer Contact Team and they have stated "I can confirm that the Ombudsman Service can accept complaints relating to GC9 and The UTCCRs as they are within the scope of its scheme."

Resolution sought:

• That my contract is cancelled (back dated to X when I first contacted Vodafone);
• All sums paid by me from this date are refunded (as the contract should have been cancelled),
• Vodafone provide a PAC code
• Vodafone provide an Unlock code
• Compensation in the sum of £50 is awarded to reflect the poor customer services I have received and the frustration and stress caused by Vodafone constantly failing to address the question of compliance with GC 9.6. despite X attempts to gain a response.

Separately that as the Vodafone price rise clause is not compliant with the UTCCRs that all sums taken from my account over and above those set at the originally agreed contract price (for both out of bundle and core subscription price rises) are refunded in full back dated to August 2008 (six year limitation on bringing a case under the UTCCRs)

Complaint:

This claim is in connection with Vodafone refusing to release me penalty free from contract as required under GC 9.6 and the UTCCRs as the price variation clause used by Vodafone within its’ contract is not compliant with either GC 9.6 or the UTCCRs, and after X attempts of trying to elicit a response from Vodafone to explain how the clause is compliant Vodafone have refused to address the issue. Ofcom have confirmed that "the Ombudsman Service can accept complaints relating to GC9 and The UTCCRs as they are within the scope of its scheme."
I believe that Vodafone’s price variation clause is not compliant with:

• Ofcom General Condition 9.6 (GC 9.6)
  Further or in the alternative;
• Is unfair under the Unfair Terms in Consumer Contracts Regulations (UTCCRs) - Schedule 2 Paragraph 1 (j)
  Further or in the alternative;
• Is unfair under the UTCCRs - Schedule 2 Paragraph 1 (l)
  Please note this complaint is not about Vodafone’s commercial decision to increases prices, as a business Vodafone is free to make any commercial decision it chooses.

On Date Vodafone contacted me informing me of an increase in the cost of the out of bundle charges associated with my contract, increases range from 0% to 122% , and if I were to make one of each “call” the average increase would be 23%.

When deciding on which contract to take the price of ancillary service was taken into account as by virtue of being services available to phone users they are services that I am likely to use (regardless of if I have actually used them to date or not), and whilst I am in the fixed period of my contract I am unable to avoid these increased charges without incurring inconvenience and the increase therefore is preventing me enjoying my contract in the way intended.

Separately that as the Vodafone price rise clause is not compliant with the UTCCRs that all sums taken from my account over and above those set at the originally agreed contract price (for both out of bundle and core subscription price rises) are refunded in full back dated to August 2008 (six year limitation on bringing a case under the UTCCRs)

RandomCurve

A claim for the Ombudsman Service (OS) - Vodafone.

post 2 of 3


Under GC 9.6 (Pre January 23rd 2014 definition) the price rise is likely to be of Material Detriment to me.


My claim is NOT in connection with the Vodafone contract definition of Material detriment, but the Ofcom regulation definition of Material Detriment. The Ofcom regulation must override any term placed in the contract, as if the contract was allowed to override regulation then the regulations would be meaningless as Vodafone could simply “over rule” them via its’ contact terms.

Vodafone are relying on their contract clause 11b to impose this price increase on me which sates:
.
11 Ending this agreement

b) You may end this agreement by writing to us if:
• we don't do something fundamental that we should have done under this agreement (for example, if there is a complete failure of the entire UK network for seven days in a row due to something we have done), within seven days of you asking us in writing;
• we tell you that there will be an increase in the plan charge (calculated before the addition of VAT or other levy) and you write to us within one month of us telling you about the increase;
• we change this agreement to your material detriment. This includes (i) increasing charges in the UK (calculated before the addition of VAT or other levy) which has the effect of increasing your total charges (based on your usage in any of your last 3 bills) by more than 10% when compared with the charges 12 months prior to the increase; or (ii) changing or withdrawing services. We will tell you if this is the case. You need to write to us within one month of us telling you about the change, withdrawal or increase. This does not apply if this is a change to or withdrawal of third party services not included in your plan, which we and you can cancel (or stop using) without ending this agreement.

They have then stated to me:
“We have looked at your usage over the last 3 months and can see that your bills would not have increased by more than 10% as a result of the price increase. Therefore you are not eligible to cancel under the 10% clause.”

I believe the term highlighted in red is not complaint with GC 9.6 for the following reasons:

• GC 9.6 does NOT place a 3 month time limit on considering if a change is likely to be of material detriment to me; it is over the life of the contract;
• GC 9.6 looks forward not backward when considering if a change is likely to be of Material Detriment, and
• GC 9.6 makes no reference to 10% being a trigger point for a change to be of Material Detriment, indeed I will show that Ofcom intended Material Detriment to mean changes that were not to my benefit or at least neutral on me (over the life of the contract).
  
  General condition 9.6 states:

9.6 The Communications Provider shall:
(a) give its Subscribers adequate notice not shorter than one month of any modifications likely to be of material detriment to that Subscriber;
(b) allow its Subscribers to withdraw from their contract without penalty upon such notice; and
(c) at the same time as giving the notice in condition 9.6 (a) above, shall inform the Subscriber of its ability to terminate the contract without penalty if the proposed modification is not acceptable to the Subscriber.

In the regulatory context it is clear that there is no 3 month time limit on considering if a change is “likely to be of material detriment”, it is also clear that there is no reference to 10% being a trigger for Material Detriment.
Ofcom have clearly articulated what is meant by Material Detriment when explaining why the term was introduced into GC 9.6 by OFTEL and retained by Ofcom (from Ofcom publication “ Price rises in fixed term contracts - Decision to issue Guidance on General Condition 9.6”, Published in October 2013”) and the following applies to pre 23rd January contracts and all “out of bundle” price increases:
"Our intention was to reflect our general duties and principles of good administration and proportionality in particular. We sought, in light of these, not to rule out contract variations altogether. For example, those beneficial to, or having a neutral impact on, a subscriber.”


It is clear from the above that under GC 9.6 ANY change that is neither to my benefit or neutral is of Material Detriment. In other words Material Detriment in the regulatory context simply means DETRIMENT. As it is likely that I might use the services for which Vodafone has increased its prices (by virtue of them being telephony services) then it is likely that the change (over the life of the contract) will be of Material detriment (neither to my benefit nor neutral).

This interpretation by Ofcom (although slightly more restrictive) clearly reflects the intentions of the Universal Service Directive (USD) USD 20/(22) for which Ofcom have a legal duty to incorporate into UK law and they have done so via GC 9.6. It is clear that the intention of USD 20/(22) was to give the CONSUMER the choice to cancel their contract during a fixed period for ANY modification that is made which they do not accept as follows:

USD 2002/22/EC
Chapter IV – End User Agreements
Article 20 – Contracts
Paragraph 4

4. Subscribers shall have a right to withdraw from their contracts without penalty upon notice of proposed modifications in the contractual conditions. Subscribers shall be given adequate notice, not shorter than one month, ahead of any such modifications and shall be informed at the same time of their right to withdraw, without penalty, from such contracts, if they do not accept the new conditions.

So from the USD it is clear that the Material Detriment must be a very low threshold and as this increase in prices is neither to my benefit nor neutral in its impact on me, I should be entitled to the penalty free cancellation under GC 9.6 as requested.

Further or in the Alternative

Under the UTCCRs Schedule 2 Paragraph 1(j) and associated Office of Fair Trading (OFT) guidance on Group 10 clauses I am entitled to a penalty free cancellation.

The UTCCRs are clear that in a standard form contract a modification of the terms is only fair if there is a corresponding right for me to withdraw from the contract penalty free (10.3 (c)).

Schedule 2, paragraph 1, states that terms may be unfair if they have the object or effect of:

(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract.
10.1 A right for one party to alter the terms of the contract after it has been agreed, regardless of the consent of the other party, is under strong suspicion of unfairness. A contract can be considered balanced only if both parties are bound by their obligations as agreed.
10.2 If a term could be used to force the consumer to accept increased costs or penalties, new requirements, or reduced benefits, it is likely to be considered unfair whether or not it is meant to be used in that way. …..
10.3Such a term is more likely to be found fair if:
(a) it is narrowed in effect, so that it cannot be used to change the balance of advantage under the contract – for example, allowing variations to reflect changes in the law, to meet regulatory requirements or to reflect new industry guidance and codes of practice which are likely to raise standards of consumer protection
(b) it can be exercised only for reasons stated in the contract which are clear and specific enough to ensure the power to vary cannot be used at will to suit the interests of the supplier, or unexpectedly to consumers
(c) there is a duty on the supplier to give notice of any variation, and a right for the consumer to cancel before being affected by it, without penalty or otherwise being worse off for having entered the contract.
10.4 …… Where the criteria of reasonableness are vague, or clearly meant to include the best commercial interests of the business, there will be scope for the supplier to change the bargain unfairly to the detriment of consumers, simply on the basis that he needs to protect his profit margins.



The first thing to note is that the Vodafone contract gives no reasoning as to why it will increase its costs other than it has a right to increase them – this clearly contravenes Schedule 2 Paragraph1 (j) and 10.3 (a) and 10.3 (b):

Vodafone contract price variation clause 7(a):
7 Changing charges and terms
a) We may change or introduce new charges. If we increase our charges, we'll publish the changes on our website and give you at least 14 days' notice. However, we may not give you notice of such changes if they relate to third party services which you don't regularly use.


Clearly there is no reasoning as to why and when Vodafone can increase charges, simply a statement that it may increase charges, this means that Vodafone can increase prices to protect its profit margins or to suit its business interests – both unfair under the UTCCRs. Given the breach of the UTCCRs highlighted above then I have a right under the UTCCRs to cancel my contract – 10.3 (c).

In addition by Vodafone using a 3 month reference period that is not disclosed until AFTER a price rise is announced (and the contact does not specify in which month price rises will be made) the clause is deliberately designed to be used “unexpectedly” to me which clearly goes against the guidance note 10.3(b) “….the power to vary cannot be used at will to suit the interests of the supplier, or unexpectedly to consumers

Further or in the Alternative

Under the UTCCRs Schedule 2 Paragraph 1(l) and associated Office of Fair Trading (OFT guidance on Group 12 clauses) I am entitled to a penalty free cancellation.

The UTCCRs are clear that in a standard form contract a price variation clause can only be considered fair under very strict circumstances:

Schedule 2, paragraph 1, states that terms may be unfair if they have the object or effect of:

(l) providing for the price of goods to be determined at the time of delivery or allowing a seller of goods or supplier of services to increase their price without in both cases giving the consumer the corresponding right to cancel the contract if the final price is too high in relation to the price agreed when the contract was concluded.

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's contractual obligations – has clear potential for unfairness.
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 of goods 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 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.29
12.4 A degree of flexibility in pricing may be achieved fairly in the following ways.
• 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
Comparing the Vodafone price variation clause at 7 (a) it is clear that it fails to satisfy the requirements of fairness as laid out in the OFT guidance (Group 12) and I should therefore be able to leave my contract penalty free as requested (12.4 (a) – third bullet point):
7 Changing charges and terms
a) We may change or introduce new charges. If we increase our charges, we'll publish the changes on our website and give you at least 14 days' notice. However, we may not give you notice of such changes if they relate to third party services which you don't regularly use.


The above clause is not compliant with:
12.2 – there is no reasoning as to why Vodafone can increase prices – just a statement that it can;
12.3 – there is no way of knowing if Vodafone’s cost associated with the changes made have really increased by 23% average (122% maximum) Also individual price increases of up to 122% are obviously too high in relation to the originally agreed price for these services.
12.4 (bullet 1) – the contract does not specify the level and timing of price increases - what month, how often, how much/percentage.
12.4 (bullet 2) – there is clearly no linkage to a relevant inflation rate (I am unaware of any current UK inflation rate that is at 23% - let alone 122% and in any case no published inflation rate is referred to within the contract - even clause 11b of the contract tries to relate an increase to an arbitrary 10% - and not a relevant inflation rate.
Given the non-compliance with Schedule 2 Paragraph 1 (l) of the UTCCRs then as per 12.4 (bullet point 3) I should be have a corresponding right to cancel my contract penalty free on the imposition of a price increase under the contract term relied upon.

RandomCurve

I'll put a word document on the Fight Mobile Increases site later tonight
http://fightmobileincreases.com/fight-vodafone/

Mikmonken

RandomCurve wrote: »

The longer Ofcom delay the more certain I am they will side with the industry. If they looked at the facts of the case they would see straight away what EE have done with the T&Cs and they know the GC 9.6 regulations (Ed Richards help to write it apparently) and they know the UTTCCRs (as a desiginated enforcer):
OFT Group 10 regulations
"10.2 If a term could be used to force the consumer to accept increased costs or penalties, new requirements, or reduced benefits, it is likely to be considered unfair"
AND
10.3 (c) there is a duty on the supplier to give notice of any variation, and a right for the consumer to cancel before being affected by it, without penalty or otherwise being worse off for having entered the contract.

So the only possible cause for delay is to discuss with the industry either How to put this right without effecting the businesses OR (more likely) What weasel words can be used to avoid doing anything (Administrative Priorities being the favourite get out of jail free card).

Come on Media and MSE where are you?

Looks like we'll have an answer tomorrow... or at least an email tomorrow saying we'll have to wait till Monday #everthepessimist

RandomCurve

Vodafone claim - 3 of 3 - only use this part if you have KEPT the green text in post claim 1 of 3!




Separately – I claim that all previous price rises applied to my Vodafone account should be refunded in full back dated to August 2008 as the clause relied upon by Vodafone to implement the price increase is unenforceable.

Vodafone’s price variation clause is not compliant with the UTCCRs as it fails the test of fairness in a number of ways and as such price rises applied previously to my account should be refunded in full.

The main issues are:
Under Schedule 2, paragraph 1, (l) UTCCRs it is assumed that price variation clauses are unfair unless they meet specific criteria (and even then they may still be deemed to unfair)

• The Vodafone price variation clause does not (as per OFT guidance 12.4 – bullet 1) define within narrow limits if not precisely either the level or timing of any price increases. In fact the clause appears to be deliberately vague referring to an unspecified 3 month period. It is vague to the point that I cannot determine if in a 24 month contract I will be subjected to zero,1, or 2, price increases – or more should Vodafone increase core subscriptions in one month and out of bundle charges in a different month!.
• The Vodafone price variation clause is not (as per OFT guidance 12.4 bullet 2) linked to a specified relevant inflation rate (such as CPI), but rather talks about not exceeding 10%.
• The Vodafone price variation clause is discretionary (therefore not compliant with OFT guidance 12.2) as it gives Vodafone the right to increase prices by up to 10% (in fact for out of bundle charges it can – and has – more than doubled them in some instances as Vodafone relates the 10% calculation to the entire cost of the contract and not individual elements), for whatever reason Vodafone’s decides as there is no clearly defined grounds in the contract for applying price increases.
• Vodafone has no automatic right to recover cost increase in its business (as per OFT guidance 12.3). The UK market is a mature and stable market and Vodafone are an experienced player in that market, there is no reason why Vodafone should be unable to anticipate with reasonable certainty likely cost changes over a 24 month period, and OFT guidance 12.3 expressly states that price variation are assumed to be unfair because – “… 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.”
• Also under OFT 12.3 “….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. In the case of Vodafone it is clear that the price increases it has suffered are not as per the price rises applied to my account as for core subscription price increases the price of the handset, and the licence to operate the network were paid before I entered my contract and so could not possibly have an inflation element, additionally call termination rates are published by Ofcom years in advance and show rates have reduced, so anther element of the contract that should have no inflation applied as no cost increase would have been incurred by Vodafone. As for out of bundle charges I put Vodafone to strict evidence to show that its costs associated with each element of increases have increased by the various percentages applied over the years –and to explain why Vodafone was unable to anticipate or mitigate these increases.
• Finally I have no way of knowing what cost increases Vodafone factored into the original contract price, and therefore I do not know if Vodafone are effectively double counting inflation in my contract. Vodafone would have had a duty of care (implied in OFT 12.3) to have priced my short 24 month contract correctly from the outset, I should not be penalised (as per OFT 12.3) for Vodafone’s inability/lack of care in correctly pricing the contract from the outset –this is a risk that Vodafone should bear and under the UTCCRs Vodafone cannot pass that risk to me.

RandomCurve

Some good news from Ofcom:




From:OCCtelecoms [EMAIL="OCCtelecoms@ofcom.org.uk"]OCCtelecoms@ofcom.org.uk[/EMAIL]

Ofcom reference: 1-265323635



17 July 2014

Dear RC


I refer to your email of 10 July 2014 about a number of Vodafone customers requesting that Vodafone explain their out of bundle price increase.


.......................


On your second question, I can confirm that the Ombudsman Service can accept complaints relating to GC9 and The UTTCRs as they are within the scope of its scheme.


Yours sincerely

XXXX
Consumer Contact Team

davethorp

Might have to get the ombudsman service to relook at my complaint against O2 then. They rejected it using the business decision excuse despite me mentioning both the UTCCR and GC9 in my complaint

Mikmonken

RandomCurve wrote: »

Some good news from Ofcom:




From:OCCtelecoms [EMAIL="OCCtelecoms@ofcom.org.uk"]OCCtelecoms@ofcom.org.uk[/EMAIL]

Ofcom reference: 1-265323635



17 July 2014

Dear RC


I refer to your email of 10 July 2014 about a number of Vodafone customers requesting that Vodafone explain their out of bundle price increase.


.......................


On your second question, I can confirm that the Ombudsman Service can accept complaints relating to GC9 and The UTTCRs as they are within the scope of its scheme.


Yours sincerely

XXXX
Consumer Contact Team

Fingers crossed more of the same tomorrow when I get the EE response!!

RandomCurve

factor29 wrote: »

Just had my reply from Vodafone in reply to latest mail



Good Evening

Thank you for contacting Vodafone.

You have requested we respond by terminating the contract with no early termination fee or supplying a deadlock letter.

As advised previously we are not looking to terminate the contract with no early termination fee as the contract has not been effected by more than 10% by the out of bundle price increase. This has been detailed in previous correspondence.

We must also advise we cannot, at this time, supply a deadlock letter for this complaint as the complaint is in regards to a commercial decision made by Vodafone. The ombudsman does not handle complaints in relation to commercial decisions.

We trust this clarifies matters for you.

Kind Regards

I think in your case another email to Voda is required (you may want to send them a copy of your full response from Ofcom)


Dear X


Thank you for your email dated X.


Please be advise that my dispute with you has nothing to do with your commercial decision to raise prices, it is to do with if your T&Cs are compliant under GC 9.6 and the UTCCRs. Ofcom have been contacted on this issue and their customer Contact Team have advised (under reference 1-265323635)


"On your second question, I can confirm that the Ombudsman Service can accept complaints relating to GC9 and The UTTCRs as they are within the scope of its scheme."


AS Ofcom have confirmed that this is within the scope of the ADR scheme then under GC 14 you are required to issue a deadlock letter. Unless you propose to fully answer the questions put to you 5 times already or are prepared to grant the penalty free cancellation requested, then I will include your non compliance with GC 14 within my compliant to the Ombudsman Service should a deadlock not be received within 7 days.


Regards