EE.T-Mob.Orange. Change T&C From 26th March 2014

Ed13P

Not sure how a price rise for contracts entered into after 23rd January 2014 is a material detriment to consumer in Ofcom's view, but not for contracts entered into before that date. It is either of material detriment or it isn't - it can't suddenly change because of when you entered into your contract at least not for civil/contract cases. Rules are not normally retrospective for criminal or enforcement purposes so I can see how Ofcom might not do anything about EE but their view about material detriment is irrational.

boatman

So OFCOM have basically given the green light for all providers to increase prices by RPI every year, great.

shak2

Lifes_Grand_Plan wrote: »

That comment from Ofcom pretty much sums up their attitude to everything, lazy, work shy shysters!

If not this then what exactly are they doing instead?

tateman

It had been 9 days since I submitted a response to EE's defence and hadn't heard anything so gave them a call. CISAS did say they had quite a backlog what with bank holidays and the number of cases.

Anyway, an hour later I have a letter stating Emma Knight has been appointed my adjudicator. Fingers crossed.

Dave92en

Still no defence as of yet and today is their deadline, should be interesting!

persil33

just had my decision from cisas. another win both contracts cancelled without penalty backdated to 18th February. one was pre the other post on tmobile. adjudicator was dean taylor. oh almost forgot got the full 100 pound compensation.
used randomcurves templates. big thank you to you rc without your help would never have won

jon1555

Dave92en wrote: »

Still no defence as of yet and today is their deadline, should be interesting!

Can take upto 5 days after the deadline to receive it from cisas. Most likely won't come through until Monday!

Dave92en

jon1555 wrote: »

Can take upto 5 days after the deadline to receive it from cisas. Most likely won't come through until Monday!

I called l cisas night to check if anything had been sent to then rand they said no and if I don't get the defense today they'll be in touch on Friday. Should I just ignore that?

jon1555

Dave92en wrote: »

I called l cisas night to check if anything had been sent to then rand they said no and if I don't get the defense today they'll be in touch on Friday. Should I just ignore that?

May be worth giving them a call tomorrow to just check what's happening.

I don't think there's been anyone yet where ee have failed to send a defence.

BallsMan

shafeeq wrote: »

Response from OFCOM

Dear Sir/Madam



I am writing in response to your recent email to Ofcom regarding:

(i) the modification to price variation terms in EE contracts entered into before 23 January 2014; and



(ii) EE’s price increase in 2014.

I will deal with these in turn, but I start by putting into context Ofcom’s powers in these matters.



Background

Ofcom has two sets of powers that are relevant to price increases and related contract terms. The first is in the General Conditions, which are sector-specific rules Ofcom has made that apply to all providers of telecommunications services. The second is in the Unfair Terms in Consumer Contracts Regulations 1999 (the “UTCCRs”), which are part of UK consumer law that applies to all providers in all sectors. The first is most relevant here. I provide some information about the second because Ofcom has also considered the application of those regulations at various stages of our work on mid-contract price rises.

Ofcom exercises these powers on behalf of consumers generally, rather having a role in individual consumer’s disputes. In deciding whether and how to exercise the powers – which cases to devote our limited resources to – we are guided by our administrative priority framework. I explain as follows.



General Conditions

The relevant General Condition here is General Condition 9.6 (“GC 9.6”). It says that if any price change is likely to be of material detriment to a customer, providers are required to give customers at least one month’s notice of the change and allow them to withdraw from the contract without penalty. Ofcom’s recently published guidance is about how we intend to apply this rule in relation to contracts for landline, mobile and/or broadband services entered into on or after 23 January this year (the date the guidance came into force).

The guidance explains that, for these new contracts, Ofcom is likely to regard any increase to the core subscription price agreed at the point of sale as likely to cause material detriment. The core subscription price is the recurring, typically monthly, price the customer is bound to pay for services (e.g. for line rental and airtime). Where a provider seeks to increase the core subscription price agreed, the provider must allow customers to exit their contract penalty free.

The UTCCRs

The UTCCRs apply to terms which providers of goods and services use in standard-form contracts (sometimes called the “small print”). They say that, subject to exemptions for certain terms relating to the price and the subject matter of the contract, those terms must be fair. In the words of the relevant regulation, the terms must not, contrary to the requirement of good faith, cause a significant imbalance in the consumer’s and provider’s rights and obligations arising under the contract, to the detriment of the consumer.

The regulations include an indicative schedule of terms that in certain circumstances may be unfair. These include some terms that say the provider may vary the price.



Ofcom’s role

Ofcom’s role is to enforce the above rules on behalf of consumers generally. In particular, where we think a provider has broken the rules in a way that affects a significant number of consumers and we consider that action should be taken to penalise the provider and/or to change its conduct, for the benefit of consumers generally. We only have powers to do that. We do not have powers to become involved in, nor resolve, individual consumer’s disputes.

So, where we consider a provider has breached GC9.6, we may take action that results in the imposition of a financial penalty on the provider, and requires it to change its actions and processes to come into compliance with the GC and to remedy the breach. Where we think a provider is using terms that are unfair under the UTCCRs, we can apply to the court for an order to stop the use of those terms, for the benefit of all consumers. It would be for the court to decide if the term is unfair and whether to make the order.



Ofcom does not, however, have the resources to pursue every case in which a provider may have breached GC 9.6 and/or used unfair terms. To ensure that we use our resources effectively, we must make decisions about whether or not to open investigations by weighing up the likely benefits of doing so against the resources that would be required.



Accordingly, in deciding which cases to pursue – whether and how to use our powers – we apply our administrative priority framework. This takes into account factors such as the degree of harm and the risk to consumers’ interests as a result of the alleged wrongdoing. Another relevant factor is whether the alleged conduct is, or appears to be, a repeated, intentional or particularly flagrant breach of the relevant rules.



The overall effect is that we do not pursue all cases that come to our attention. Neither can we, nor do we, take action that will necessarily resolve every individual consumer’s dispute in the way they would like. There are some cases in which our action does not resolve those disputes. There are others where we take a position or action, or decide not to act, and individual consumers do not agree.



Individual consumer’s complaints

Consumers are able to pursue their own individual complaints with providers, whether or not Ofcom takes action on behalf of consumers generally. Ofcom’s GCs require providers to publish and follow complaints procedures and to belong to Alternative Dispute Resolution (ADR) schemes. Consumers can generally pursue their cases through those procedures and schemes. Although Ofcom has no role in these individual matters, we may be able to provide some general advice about what the rules say and about how consumers may pursue their own complaints.



Application

Against the above general background, I deal below with the specific matters covered in your email.



EE modification of price variation terms

We are aware that EE has modified the relevant price variation terms for consumers who entered into a contract with EE (including Orange and T-Mobile) before 23 January 2014. The modification included a more specific reference to the measure (RPI) by which EE sought to reserve the right to increase its prices.



We acknowledge that there may be scope to take different views. However, Ofcom has taken the view, based on the information we have, that the change does not appear to us to be one likely to give rise to the right to cancel the contract under GC9.6. We do not consider it to be a matter we should pursue further as a matter of administrative priority.

The reasons are as follows:

1. The revised terms are likely to put consumers in a better, or at least no worse, position than the previous terms. They do not purport to create a right to increase prices more than was previously the case, and provide more clarity to subscribers as to the published RPI figure that will be used in such increases.



2. The new term sets out a position that, if or when applied, is unlikely in our view to cause material detriment to relevant consumers. Consumers to whom the new term applies (who will be consumers who entered into their contracts before 23 January 2014, and in respect of whom, therefore, our recent guidance does not apply) will be able to exit the contract without penalty for price increases that exceed the relevant published RPI figure.



3. Accordingly, the new term is unlikely to be a change that itself is likely to cause material detriment. On that basis, it would not require providers to notify and provide subscribers with the right to withdraw from the contract without penalty under GC9.6.

EE price increase in 2014

We are also aware that EE has announced an RPI increase to the subscription price for consumers in contracts entered into before 23 January 2014. Ofcom’s guidance on the application of GC9.6, described above, does not apply to these contracts. We made clear in the consultation that led to this guidance that our final decision would not be retrospective: it would not apply to contracts entered into before our decision was made. This is in line with general legal principles.



In this case, the relevant contracts were entered into before 23 January 2014. The revised price variation terms came into effect, and the relevant price increase will take effect, after that date. These modify the terms of the existing contracts. They did not, and will not, result in new contracts being made. As the contracts pre-date 23 January this year, Ofcom’s recent guidance does not apply. Instead, the position is as follows.



In relation to contracts entered into before 23 January, Ofcom’s position generally is that, where the provider’s terms and conditions allow for a core subscription price increase up to RPI, we are unlikely to treat such an increase as materially detrimental. We would not, therefore, generally take the view that customers on such contracts should be given the right to end the contract without penalty under GC 9.6. Neither, generally, would we be likely, taking into account our administrative priorities, to take action if the provider did not allow customers to end their contracts.



In this case, EE has applied contract terms that, in effect, provide for an annual core subscription price increase of up to RPI. It appears to have applied the RPI figure provided for by the relevant terms. Again, we agree there may be scope for different views. However, Ofcom’s view, in with the above, is that such a price increase is unlikely to give rise to material detriment and to rights to terminate contracts under GC9.6, and that this is not a matter in which we should take action on behalf of consumers generally as a matter of administrative priority.



Nevertheless, individual customers affected by these sorts of price increases might consider that the increase is to their material detriment. If they do, those customers can request to their provider (here, EE) that they be allowed to exit the contract without penalty. If the provider does not agree, the customer could pursue the matter under the provider’s complaints procedure. If the complaint is not resolved after 8 weeks, or a deadlock is reached earlier, the customer may refer the complaint to the relevant ADR scheme.



Please note a copy of your complaint has been recorded here at Ofcom.



Yours faithfully



Jessica Eyles

Consumer Contact Team

Received same email