MSE News: O2 to hike its prices by 2.7% - can you leave your contract penalty-free?

ChilliP2012

@RC

I'd appreciate it if you can look through the following and give me your thoughts/opinions and advise of any changes I would need to make before sending this off.

Dear Customer Services Representative,

On review of the Unfair Terms in Consumer Contract Regulations 1999 (UTCCRs) and the Office of Fair Trading (OFT) general guidance on the UTCCRs I believe that the price variation clause in our contract is in breach of the UTCCRS and therefore unenforceable by O2 as it breaches the following sections of the UTCCRs:

1. The price variation clause was not clearly and adequately drawn to my attention during the sales process
a. Schedule 2 Paragraph 1 (i) & (L) and OFT Group 9 guidelines especially Paragraphs 9.2 and 9.4 and Group 12 especially 12.4

Without prejudice to the above

2. The price variation is discretionary (capped by RPI, but not linked to anything at all)
a. Schedule 2 Paragraph 1 (J) and OFT Group 10 guidelines especially Paragraphs 10.2 and 10.3b

Without prejudice to the above

3. You cannot Implement a price rise clause other than for the purpose stated in the contract (there is no purpose stated in the contract– hence why it is discretionary).
a. Schedule 2 Paragraph 1 (L) and OFT Group 12 guidelines especially Paragraphs 12.1, 12.2 and 12.3

Without prejudice to the above

4. You cannot pass risks to me that O2 is better able to control or anticipate
a. Group18b of the OFT Guidelines especially paragraphs 18.2.1, 18.2.3 and 18.2.5

Under UTCCRs Schedule 2 Paragraph 1 (Q) the burden of proof does not lie with the consumer, therefore I put O2 to strict proof that:

5. That the price variation is not discretionary

Without prejudice to the above

6. The price increase applied to my contract is an accurate reflection of cost increases incurred in operating my contract over and above those already factored into the initial contract price;

Without prejudice to the above

7. That the initial price of the contract had not already factored in any anticipated cost increases associated with the operation of a 24 month contract

Without prejudice to the above

8. The price variation clause was clearly and adequately bought to my attention at point of sale

Whilst OFCOM has not given firm guidance on what material Detriment means in GC 9.6 (other than what applies post 23 Jan 2014) it is widely held that any increase in line with RPI would not be of Material detriment as RPI is the official inflation rate for the UK and therefore only increase in excess of RPI would be a real terms increase, and therefore Material detriment only occurs if the increase is an increase in real terms.

If we accept the premises that Under GC 9.6 Material detriment means a "real terms price rise" then the O2 increase of RPI is of material detriment to me (and therefore under GC 9.6 I am entitled to a penalty free cancellation of my contract) as follows:

In March 2013 (9 months BEFORE O2 announced their price increase) the Office of National Statistics (ONS) published a report on Statistical measures of Inflation which clearly states that RPI is no longer a National Statistic as its calculation methodologies do not meet international standards:

http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/march-2013/stb---consumer-price-indices---march-2013.html#tab-Retail-Prices-Index--RPI--and-RPIJ-

"In accordance with the Statistics and Registration Service Act 2007, the Retail Prices Index and its derivatives have been assessed against the Code of Practice for Official Statistics and found not to meet the required standard for designation as National Statistics. The full assessment report can be found on the UK Statistics Authority website."

So RPI has been replaced with CPI as THE official measure of UK inflation and CPI is the measure recognised a THE National statistic for the UK inflation AND is used throughout Government. As the CPI rate is generally lower then RPI (for January 2014 RPI was 2.8% whilst CPI was only 1.9%), then the increase applied to my account must be a real terms increase and therefore under GC 9.6 triggers my right to a penalty free cancelation.

For the avoidance of doubt:

9. I am not seeking a standard letter informing me that you have complied with GC 9.6. Any such response will be considered a lack of a duty of care in responding to my request;

10. I am not seeking to challenge O2’s business decision to raise its prices (that is a decision for O2 to make) I am challenging whether the contract clause is enforceable under the UTCCRs 1999 for the reasons stated above (Paragraphs 1 to 4).

As it has not been possible to resolve this matter amicably, and it is apparent that court action may be necessary, I write in compliance with the Practice Direction on Pre-Action Conduct.

• The cost of certain out-of-bundle texts and calls, as well as international call costs are of material detriment to me.
• O2 increasing my phone pay monthly tariff TWICE within 24 months of contract is unacceptable with no extra customer value
• When I purchased my O2 contract in November 2012 via mobiles.co.uk, I was at no point informed that there would be future price increases.
• At NO TIME has O2 informed me of any RPI increases by email, text message or by post.

From you I am claiming the immediate cancellation of my contract without penalty.

I can confirm that I would be agreeable to mediation and would consider any other system of Alternative Dispute Resolution (ADR) in order to avoid the need for this matter to be resolved by the courts.

I would invite you to put forward any proposals in this regard.

In closing, I would draw your attention to section II (4) of the Practice Direction which gives the courts the power to impose sanctions on the parties if they fail to comply with the direction including failing to respond to this letter before claim.

I look forward to hearing from you within the next 28 days.

Should I not receive a response to my letter within this time frame, then I anticipate that court action will be commenced with no further reference to you.

Yours faithfully.

RandomCurve

ChilliP2012 wrote: »

@RC

I'd appreciate it if you can look through the following and give me your thoughts/opinions and advise of any changes I would need to make before sending this off.

The letter is mixed.


Points 1 to 8 are arguments to make if you want the price rise cancelled, the remedy available to you if you win these arguments can NOT get you a penalty free cancellation.


The arguments after point 8 are the ones to use if it is the penalty free cancellation option that you are trying to achieve.


The arguments (to my knowledge) have not been tested before, but I think they make sense:

1. Material detriment means anything over RPI as this would be a REAL TERMS increase, but
2. RPI has been replace with CPI so anything OVER CPI is a REAL TERMS increase and
3. If Material Determent means REAL TERMS increase then any increase over CPI triggers your cancellation right under GC 9.6 REGARDLESS of what your contract says
4. The logic seems correct!

You will also need to remove points 9 and 10.


Good Luck

ChilliP2012

Ok, I've edited it now. If this is ok then I fire it off tomorrow as a letter before action.

Dear Customer Services Representative,

Whilst OFCOM has not given firm guidance on what material Detriment means in GC 9.6 (other than what applies post 23 Jan 2014) it is widely held that any increase in line with RPI would not be of Material detriment as RPI is the official inflation rate for the UK and therefore only increase in excess of RPI would be a real terms increase, and therefore Material detriment only occurs if the increase is an increase in real terms.

If we accept the premises that Under GC 9.6 Material detriment means a "real terms price rise" then the O2 increase of RPI is of material detriment to me (and therefore under GC 9.6 I am entitled to a penalty free cancellation of my contract) as follows:

In March 2013 (9 months BEFORE O2 announced their price increase) the Office of National Statistics (ONS) published a report on Statistical measures of Inflation which clearly states that RPI is no longer a National Statistic as its calculation methodologies do not meet international standards:

http://www.ons.gov.uk/ons/rel/cpi/co...RPI--and-RPIJ-

"In accordance with the Statistics and Registration Service Act 2007, the Retail Prices Index and its derivatives have been assessed against the Code of Practice for Official Statistics and found not to meet the required standard for designation as National Statistics. The full assessment report can be found on the UK Statistics Authority website."

So RPI has been replaced with CPI as THE official measure of UK inflation and CPI is the measure recognised as The National Statistic for UK inflation AND is used throughout Government. As the CPI rate is generally lower than RPI (for January 2014 RPI was 2.8% whilst CPI was only 1.9%), then the increase applied to my account must be a real terms increase and therefore under GC 9.6 triggers my right to a penalty free cancellation.

As your price increase is over CPI, this triggers my cancellation right under GC 9.6 REGARDLESS of what my contract says.

As it has not been possible to resolve this matter amicably, and it is apparent that court action may be necessary, I write in compliance with the Practice Direction on Pre-Action Conduct.

• The cost of certain out-of-bundle texts and calls, as well as international call costs are of material detriment to me.
• O2 increasing my pay monthly tariff TWICE within 24 months of contract is unacceptable with no extra customer value.
• When I purchased my O2 contract in November 2012 via mobiles.co.uk, I was at no point informed that there would be future price increases.
• At NO TIME has O2 informed me of any RPI increases by email, text message or by post.

From you I am claiming the immediate cancellation of my contract without penalty.

I can confirm that I would be agreeable to mediation and would consider any other system of Alternative Dispute Resolution (ADR) in order to avoid the need for this matter to be resolved by the courts.

I would invite you to put forward any proposals in this regard.

In closing, I would draw your attention to section II (4) of the Practice Direction which gives the courts the power to impose sanctions on the parties if they fail to comply with the direction including failing to respond to this letter before claim.

I look forward to hearing from you within the next 28 days.

Should I not receive a response to my letter within this time frame, then I anticipate that court action will be commenced with no further reference to you.

Yours faithfully.

RandomCurve

Looking good!


Just take out the first paragraph re the UTCCRs as that is not relevant.

ChilliP2012

Done & thanks

Wish me luck, as this is going to be my LBA. If they fail to cancel my contract without penalty, then it's off to Sheriff Court.

NittyGritty

not sure if this is of any use to anyone, but my friend just got message from ombudsman accepting his case so at least it wasn't thrown out in first hurdle, so I guess its now 50/50 in a separate email it showed all the points raised including £100 compensation and cancelling free of charge. and all the relavant details about his complaint


so will post back when he hears anything


Dear Mr ********
Thank you for your email received about O2.
Please read your complaint form carefully. This is a summary of the main points of your complaint and confirms what you want to happen to resolve the problem. If this is correct the account holder must sign and date the declaration at the end of the form (please use black ink).
Please send the form back to us as soon as possible. Please also include any information you have about what you have done so far to try to resolve your complaint. This might include copies of letters, emails, call logs and bills. If you have already sent some information to us you do not need to send this again.
The quickest way to return your form and documents to us is to scan and email them to complaintform@ombudsman-services.org. Alternatively, you can fax or post them.
We will take care of your personal data and will only use it to investigate your complaint.
The information you send will be shredded after use so please do not send original documents.
Our full privacy statement is on our website https://www.ombudsman-services.org.
When we have your complaint form and information, we will ask the company you are complaining about to send us its information about your complaint. After this an investigation officer will contact you to talk about the best way to resolve your complaint.
We aim to resolve your complaint within six to eight weeks from the date we receive your signed complaint form.
Yours sincerely

ChilliP2012

NittyGritty wrote: »

not sure if this is of any use to anyone, but my friend just got message from ombudsman accepting his case so at least it wasn't thrown out in first hurdle, so I guess its now 50/50 in a separate email it showed all the points raised including £100 compensation and cancelling free of charge. and all the relavant details about his complaint


so will post back when he hears anything


Dear Mr ********
Thank you for your email received about O2.
Please read your complaint form carefully. This is a summary of the main points of your complaint and confirms what you want to happen to resolve the problem. If this is correct the account holder must sign and date the declaration at the end of the form (please use black ink).
Please send the form back to us as soon as possible. Please also include any information you have about what you have done so far to try to resolve your complaint. This might include copies of letters, emails, call logs and bills. If you have already sent some information to us you do not need to send this again.
The quickest way to return your form and documents to us is to scan and email them to complaintform@ombudsman-services.org. Alternatively, you can fax or post them.
We will take care of your personal data and will only use it to investigate your complaint.
The information you send will be shredded after use so please do not send original documents.
Our full privacy statement is on our website https://www.ombudsman-services.org.
When we have your complaint form and information, we will ask the company you are complaining about to send us its information about your complaint. After this an investigation officer will contact you to talk about the best way to resolve your complaint.
We aim to resolve your complaint within six to eight weeks from the date we receive your signed complaint form.
Yours sincerely

It would also be very nice to know exactly what he put in his/her original email/letter of complaint to them. As the Ombudsmen seem to be accepting some complaints as opposed to others.

ChilliP2012

Either O2 are taking the p*ss or they aren't taking my threat of legal action seriously.

Just received a response to my LBA. Guess what?

Hi Chilli

We’re sorry you remain unhappy. Price increases are never welcome but inflation has an impact on our costs. We will continue to invest in the network and the services that matter to our customers. We hope we've clearly explained the reasons for this decision.

As your contract started before the 23 January 2014, it allows us to apply a yearly price rise by no more than RPI, which means an additional charge of 64p on your monthly subscription. This part of the contract, stating that prices can increase, was set out both in your contract and in your summary terms.

As you've been previously advised, This is our final position on the matter. Unfortunately, your complaint about the price rise does not fall within the independent Ombudsman's remit. But if you have any other concerns that you feel we have not been able to resolve for you, or you wish to clarify the Ombudsman’s position, you can contact them on the details below for further advice:

Ombudsman Services: Communications
PO Box 730
Warrington
WA4 6WU

Phone: 0330 440 1614
Textphone: 0330 440 1600
http://www.ombudsman-services.org/communications.html
Email: enquiries@os-communications.org

Kind regards

Hayley Cooper

The same copy and paste response as per previous O2 muppets.

We'll see what they respond with once they get the summons.

:mad::mad::mad:

RandomCurve

ChilliP2012 wrote: »

Either O2 are taking the p*ss or they aren't taking my threat of legal action seriously.

Just received a response to my LBA. Guess what?



The same copy and paste response as per previous O2 muppets.

We'll see what they respond with once they get the summons.

:mad::mad::mad:

Time to start the legal proceedings then - what a strange response to have sent.

ChilliP2012

Will be doing it via MCOL tomorrow as I've had a response from them (MCOL that is).

Good Afternoon



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