Mobile Phone Contract - Price Rise Refunds

edited 14 May 2014 at 10:18PM in Mobiles
1.6K replies 135.2K views
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  • Did anybody else notice the O2 adverts in the Metro on Friday where they state (in bold and about 3 times) that prices will increase by RPI (this is how the contracts should have always been advertised)? As you can see from my email below I am pushing Ofcom to confirm that if O2 actually increase prices during the FIXED TERM, then consumer will be allowed to walk away from the contract penalty free!


    I guess the point is the customer knows up front that the contract price will rise, not thinking it's fixed. Its always been possible under the T&C just not obvious to the customer.


    The aim of the rules were to make sure anyone who expected to pay a set £XX each month for 12/18/24 months got that. O2 are simply stating clearly in advance that's not the case on some plans.

    Were the deals for O2 refresh phones? They are not like "normal" O2 deals in that Refresh is a monthly airtime plan and a 12/18/24 month phone loan contract. The airtime side is more like a 30 day rolling contract in that it can be cancelled at anytime, as long as the phone plan side is paid off.
  • Randomcurve:

    Appeal submitted to Ombudsman Services (copying in OFCOM).

    I have pointed them to the link that you have supplied, requesting that they respectfully review my case and the good news is, I submitted it this morning - they have agreed to review my complaint and respond hopefully by Monday.

    Fingers crossed... I will give you an update once it is received.
  • edited 27 February 2014 at 9:19PM
    RandomCurveRandomCurve Forumite
    1.6K Posts
    edited 27 February 2014 at 9:19PM
    SayNoToO2 wrote: »
    Randomcurve:

    Appeal submitted to Ombudsman Services (copying in OFCOM).

    I have pointed them to the link that you have supplied, requesting that they respectfully review my case and the good news is, I submitted it this morning - they have agreed to review my complaint and respond hopefully by Monday.

    Fingers crossed... I will give you an update once it is received.



    Good luck :) - This is a landmark case, because it will also show (if you win) that the new O2 contract where they clearly state they will increase prices by RPI would also be illegal!

    This was Ofcoms response to my request for them to explain if the scheme covers this situation (Q1 below):

    2 February e mail

    ADR Schemes – Ofcoms response:

    The ADR schemes will take on a case if it falls within their own terms of reference. They determine whether a complaint falls within their remit on a case-by-case basis by considering, among other things, the nature of each individual complaint. You should therefore contact the relevant scheme provider directly.

    I have responded wit the below (On Monday - and await a reply:

    The ADR schemes were set up by Ofcom and Ofcom has the contract with the ADR scheme therefore Ofcom must have terms of reference/Service Level Agreements which will included what is and is not covered. Therefore I fail to understand why you are asking the consumer to “negotiate” with the ADR scheme. Can you please clarify if the following two points are covered by the ADR – as a reminder the Ofcom website says:

    If you believe any of the terms and conditions in your ‘phone or broadband contract are unfair, you should contact your provider.

    If this doesn’t resolve your problem, ask your provider for a deadlock letter. This enables you to take your complaint to an Alternative Dispute Resolution (ADR) scheme.


    Q 1
    Case 1: A challenge to a CP that their price rise is not enforceable under the UTCCRs as a price rise in a fixed term contract is unfair due to the reasons I have laid out in earlier emails (I don’t expect Ofcom to answer if it is fair or not, just if this does or does not fall within the ADR remit).

    Q 2
    Case 2: A CP changes its T&Cs claiming the change is not of material detriment, the consumer begs to differ
  • Hi RandomCurve

    OK so response from OFCOM re ADR failing/refusing to investigate...


    Ofcom reference: *-*********

    10 March 2014

    Dear ******

    Thank you for sending Ed Richards and Lynn Parker a copy of your email dated 26 February 2014 to the Ombudsman Services: Communications.

    Your email has been forwarded to the Consumer Contact Team and I have been asked to reply. I am sorry you have not received our response before now but it was necessary to seek advice from colleagues within Ofcom on the issue you raised.

    From reading your email, I understand you submitted a complaint about O2’s mid-contract price rises to the Ombudsman but they advised they could not assist as it related to unfair terms and conditions. In view of information on Ofcom’s website regarding changes to terms and conditions (http://consumers.ofcom.org.uk/tell-us/telecoms/contracts), you asked the Ombudsman if their decision could be reviewed.

    In relation to your concerns, I can advise that Ofcom does have powers to enforce Regulations that exist to protect consumers from potentially unfair contract terms. When Ofcom receives significant complaints about a particular provider, or practice, we will decide whether to look into it and, when appropriate, reach a position on whether we consider the relevant contract is fair or not.

    We recently looked into the issue of mid-contract prices and reached a view that the rises (on the Retail Price Index scale) were not unfair but that going forward (23 January 2014 onwards), communications providers had to be clearer to consumers at point of sale about possible contract rises and that consumers could leave contracts if price rises were unexpected. For full details, please see our statement which is available through our news release at: http://media.ofcom.org.uk/2013/10/23/protection-for-consumers-against-mid-contract-price-rises/.

    When the Ombudsman is considering cases, they can take into account rulings/judgements made by the courts or decisions made by regulators. Given the publication of our statement on mid-contract price increases, it is highly unlikely that consumers wishing to make a claim on this specific issue (mid-contract price rises) through the Ombudsman (or CISAS, the other Alternative Dispute Resolution scheme) will be successful. It is on this basis, the slim likelihood of a successful claim, that the Ombudsman is unlikely to take on your complaint, rather than them being unwilling to take on complaints about unfair contract issues per se. Paragraph 4.2 of the Ombudsman’s terms of reference sets out that complaints will not be taken on if there is little likelihood of success: http://www.ombudsman-services.org/downloads/OS_TermsofReference_from1October2013.pdf

    While the Ombudsman may not consider complaints about whether a price increase is allowed/fair because the contract already includes a price variation term, it is important to stress that customers can take a complaint to the Ombudsman if they consider that the provider has not followed its own terms and conditions in implementing the price increase. For example, if they have not been given sufficient notice in the timescales set out in any terms and conditions.

    It is possible that consumers who make claims about other types of unfair contract will have a case heard by the Ombudsman. For example, 17% of complaints dealt with by the Ombudsman last year were about contractual issues, including Automatically Renewable Contracts that Ofcom prohibited in the communications sector: Page 30 http://www.ombudsman-services.org/downloads/OS%20Annual%20Report%202013.pdf

    Finally, we are working with the Ombudsman and CISAS to explore whether our websites can be updated to supply more detail of the type of cases that are likely to be considered by an Alternative Dispute Resolution scheme.

    I hope the above will be useful.

    Yours sincerely

    ********

    Consumer Contact Team





    ******************************************************************************************************************
    For more information visit https://www.ofcom.org.uk

    ******************************************************************************************************************
  • SayNoToO2 wrote: »
    What next?


    That information is just wrong. It is written on the basis that your contract was taken out post 23d January 2014, which it was not. Two alternatives:
    1. Pursue further with ADR/Ofcom, but I don't think you will get anywhere, or
    2. Take it to the Small Claims Court - where I think O2 will settle before a judgement is made (as they don't want anything reported on this), or if they do allow it to come to judgement I think you have a good case for all of the reasons in the emails to O2.


    Your call, but I am happy to help you complete the court papers (you have all the papers already - you just need to fill out a "summary sheet" and pay £35 (which is refunded if you win)).


    Remember I LOST at CISAS and EE STILL SETTLED before judgement when I put in a claim at the SCC on this very issue.
  • Reply from ADR:

    Dear *****

    I understand that you are unhappy with our decision not to investigate your complaint. I write to explain the reasons for this decision.
    O2’s standard terms and conditions at the time the price rise was announced stated:

    “5.3 You can end this Agreement without having to pay the Monthly Subscription Charges up to the end of any Minimum Period you have left, if:
    (a) we increase your Monthly Subscription Charges by more than the Retail Price Index (RPI) annual inflation rate at the date we notify you of the applicable price increase.”

    O2’s December 2012 price rise was in line with the Retail Price Index at the time and therefore under the contract there was no automatic right for customers to cancel their contract. For this reason, we are not accepting complaints about the price rise.
    You have argued that the term in the contract was not drawn to your attention at the point of sale. However, we would not necessarily expect a sales representative to explain every term in a contract to the customer at the point of sale. Customers are normally provided with terms and conditions of the contract at the outset and you have accepted that when you entered into the agreement on line you had checked the box to say you had read and accepted the terms and conditions.
    We do not think that a mid-term inflationary price rise within a contract is fundamentally unfair and we do not consider the increase in the contract in your case – an increase on £1.98 on a contract which cost £62 per month – warrants contract cancellation.

    You have disputed O2’s use the Retail Price Index as the best measure of inflation and argue that other indices would have been more appropriate.

    You also question whether O2’s costs have actually increased. I am of the view that these issues fall outside the scope of an ombudsman service and it would be inappropriate for me to investigate.
    Ofcom has recently announced new guidelines for how it expects service providers to implement mid-term price rises from 24 January 2014 onwards. However, the new guidelines do not apply to contracts agreed before that date.

    While I acknowledge you disagree with our conclusions, we have made our decision and will not be able to offer further assistance to you in relation to this matter. I hope, however, that I been able to explain the reasons for this decision.

    Yours sincerely

    *******
  • SCC it is then...

    I'll PM you for help!!

    ;-)
  • RandomCurveRandomCurve Forumite
    1.6K Posts
    SayNoToO2 wrote: »
    SCC it is then...

    I'll PM you for help!!

    ;-)

    Okay - no problem
  • RandomCurveRandomCurve Forumite
    1.6K Posts
    SayNoToO2 wrote: »
    Reply from ADR:

    Dear *****



    You have argued that the term in the contract was not drawn to your attention at the point of sale. However, we would not necessarily expect a sales representative to explain every term in a contract to the customer at the point of sale.



    *******


    This shows how biased they are! Whilst it is true that the sales person does "not have to explain every term in the contract", under the UTCCRs they do HAVE TO CLEARLY AND ADEQUATELY draw your attention to a price variation clause!


    So much for independence - a judge would not have said this!
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