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

GolfBravo

ChilliP2012

Much appreciated

RandomCurve

I've never had an O2 contract so can't send you anything, but reading what others have received it seems that O2 are trying to link the rise to helping them invest in the network, but the rules are that they can only up the price in relation to the costs of running YOUR CONTRACT! so a potential argument there.

I still think the best argument is that O2 have applied RPI to the full contract, but the cost of your phone and the license to run the network were paid by O2 before you took your contract out - so could not possibly have incurred inflation. AND call termination cost have reduced so again no inflation.

Look at the "refresh" contracts O2 advertise now - they only apply RPI to the airtime not the handset - that is all the proof you need that they have added RPI to suit their profit line and not to reflect their cost increases - as I have said before:

there is a World of difference between:

·Increasing prices due to cost increases incurred by O2 and
· Increasing prices in line with RPI

The first is allowed by the contract (capped at RPI) - the second is not permissible under the UTCCRs.

ChilliP2012

Just had word back from my contact at 3.

Here's what he's had to say: (I'll keep it brief & relevant)

It is difficult to determine what is detrimental. What is detrimental to me might be completely different to you, if you know what I mean.

In our terms and conditions, we can raise our prices, as long as it doesn't exceed RPI.

The ombudsman were throwing out these cases, in our favour because of this term, and our legal team were set to defend.
My advice however, and it might not be the answer to your question, is fight it.

Off the record, we settled out of court. It is probably cheaper for O2 if they do the same. Whether they do or not I don't know.
Hope this helps.

ChilliP2012

Also, had an email response from OFCOM today. I specifically asked them about their definition of 'Material Detriment'. Here's what they've had to say:

Dear Mr xxxxxx

Thank you for your email to Ed Richards on 31 March 2014 about O2’s price increase; I have been asked to respond as I work in the Consumer Contact Team.

Ofcom’s role is to provide advice to consumers as we do not get involved in individual disputes. As such, I will try to give you information on how you can progress your complaint.

It may first be useful to explain that Ofcom has not banned mid-contract price increases outright as we believe this would not be consistent with the Universal Service Directive. As such, consumers are still free to enter into contracts where they pay one price for a certain period and another for the remainder of the contract. However, such pricing terms would have to be made abundantly clear by the provider at the point of sale. If a provider were to introduce increases beyond what a consumer agreed to at point of sale, they would have the right to exit that contract without penalty. The guidance applies to any new landline, mobile and broadband contracts entered into on or after 23 January 2014. We will be closely monitoring providers’ contract offerings and marketing together with analysis of any complaints we receive on this matter.

In terms of you feeling that there is a loophole, we do not believe that this is the case. Our guidance makes clear that the importance of the core subscription price in the contract means it should be made completely clear to the subscriber what the subscription price or prices offered and agreed are. The subscriber must be able to compare offers, make informed decisions and rely on the price or prices agreed at point of sale.

An increase to the subscription price at the Communication Provider’s discretion, i.e. changing it to a price the consumer might not otherwise have chosen to pay over other offers on the market is, or is likely to be, materially detrimental. This is an important constraint on providers’ ability to increase prices unexpectedly.

In terms of our view on what O2 has done, O2’s commercial offerings are a matter for it, as long as it complies with the General Conditions (regulations). By issuing this guidance we clarify and reinforce the thrust of Ofcom’s position. Namely, that the principles of transparency, comparability and certainty are of critical importance in ensuring consumers can make fully informed purchasing decisions and can rely on the prices they have agreed. If we suspect that any providers are not complying with the General Conditions, we can investigate and take enforcement action.

Turning back to your complaint, as you felt that the increase was of material detriment to you, you did the right thing in following O2’s complaints procedure and referring the matter to Ombudsman Services: Communications. Whilst they are unable to consider complaints about the fairness of price increases generally, where a customer has concerns that O2 has not met its terms and conditions (e.g. not giving notice), they may be able to consider this. As such, it’s unclear why Ombudsman Services: Communications was unable to assist in your case; however, we cannot become involved in their decision.

Please rest assured I have made a formal record of your complaint; this will be used for monitoring purposes.

I hope this information is of use.

Yours sincerely



Lauren Taylor
Consumer Contact Team

So, there we have it. Ofcom's definition of material detriment.

adpod

Hi Guys,

Just thought I would update everyone here but after about 12 emails back and forth O2 have finally agreed to release me from my contract.....a win feels good

ChilliP2012

adpod wrote: »

Hi Guys,

Just thought I would update everyone here but after about 12 emails back and forth O2 have finally agreed to release me from my contract.....a win feels good

Brilliant news.

Any info you can supply to help others with their argument?

adpod

ChilliP2012 wrote: »

Brilliant news.

Any info you can supply to help others with their argument?

Will do as soon as its 100% confirmed and 100% cancelled just in case they change their mind - cant trust o2 anymore

Edit

Ill post everything later tonight - cancellation has been confirmed.

adpod

Just a quick back story, In March I went to pay my phone bill and noticed a small additional charge, I telephoned o2 and was told there was a price increase and everyone was emailed and sent a letter, I explained I hadn’t received both otherwise you would of heard from me sooner and she called me a liar - shock....

I got transferred through to someone else who said it was only emails sent out then checked her computer and confirmed no email was sent out to me and that there’s a price rise now so deal with it. I explained the contract say I must receive 30 days notice of any price rise and they have clearly breached their own contract - I was again told tough basically.

I asked for an email stating that 'no email was sent out' and that nothing O2 don’t believe they have broken their own contract. I received an email about an hour later confirming no email and giving me 30 days notice of the price rise and my account credited by £1 to cover the rise on my bill - sneaky.

I emailed the CEO telling him how underhand O2 are and also complaining about the international charges rising by 50% - I received an email saying they are allowed to rise the price of the line rental and I can purchase bundles for international calling.

This went back and forth for a couple of weeks then today I told them the 50% increase on international charges along with the monthly rental and with a 14% price increase on uk calls (I only have 300 minutes on my plan) and MMS added to the material detriment of my contract.

I received an email saying they would release me if I returned the phone - as I paid £170 for the phone I asked for a cheque for the amount I paid and was then told I could keep the phone and all cancellation charges would be dropped.

Persistence paid of on this one.

Just keep arguing on facts and not on RPI because they are allowed to do that - the other increases are far too much.

Good Luck to everyone

ChilliP2012

Top stuff, so glad you won. I hope either way that I and others win their case. I wonder if I called them whether they would tell me if they sent me an email. Might try and find out.

I urge people if they have pursued O2 through all their avenues of complaint and also the ombudsmen, then please take it to small claims. Persistence is key here.

I've attached the small claims forms here for everyone to see and if this does get to court, then I will elaborate further on my Particulars of Claim. As you can see I have been quite limited as to what I could put, but the principle is still the same.

Once again, a massive well done adpod :j :beer: