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

littlestar1974

RandomCurve, I received a response to the letter you asked us to send:

29 May 2014

Dear X

I am writing in response to your recent email regarding EE (and its different brands) and Ofcom. I can confirm that your complaint has been logged.

Background

By way of background, it would be useful for me to explain Ofcom’s powers in relation to contractual modifications.

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 contractual modification – including a 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 price increases in 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 guidance can be found here:

littlestar1974

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, when 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 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.

Your ‘Complaint 1’ - 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. We note in this context that EE and its brands always previously used RPI rather than CPI.

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.

Your ‘Complaints 2 and 3’ - EE price increase in 2013 (version 59 of T-Mobile Pay Monthly contract)

Your comments on these matters do not accurately reflect all of the relevant position. Ofcom considered the 2013 price increase you refer to (relating to v59 of T-Mobile’s contract). We took the action we considered appropriate weighing up all the relevant factors.

In particular, we wrote to EE asserting its obligations under the current regulatory framework, including the Unfair Terms in Consumer Contract Regulations 1999 (“UTCCRs”) and General Condition 9.6 (GC9.6). This resulted in EE agreeing to take action for customers on v59 of its mobile pay monthly terms and conditions, including adjusting price increases and making repayments. It communicated the details to relevant customers at the time and applied the adjustments.

We secured an outcome which in our judgment dealt with this matter appropriately, taking into matters such as the expedited securing of a positive outcome for consumers as a whole and the appropriate use of limited Ofcom resources. We decided on grounds of administrative priority that this was not a matter in which we needed to take further action on behalf of consumers generally.

ADR decisions

As mentioned above, Ofcom’s position on contractual modifications does not prevent individual customers from pursuing the matter through their 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.

It is then for the ADR scheme to decide whether it can consider a case (i.e. is it a case falling within their terms of reference). If so, it will also decide if the complaint has merit. Clearly, these points depend on the specific facts. The outcome is not guaranteed and Ofcom has no role in it.

We note from your email that cases considered by the ADR scheme have been found in favour of the customer. We have considered this, but it does not change our overall assessment of our administrative priorities and the action we should take on behalf of consumers as a whole.

In particular, ADR decisions do not override Ofcom's general duties and investigation and enforcement powers which are derived from various pieces of legislation. The role of ADR schemes is different to ours in that the schemes adjudicate on individual complaints about a provider on a case by case basis, looking carefully at the specific evidence and details that have been submitted with the claim. It is entirely plausible that the scheme reaches a decision on an individual complaint that differs from our overall assessment on behalf of consumers generally, and that this shows that the Ofcom-approved ADR process is operating effectively.

Yours sincerely

Keverso

Another two for the score card...

I just had my decisions back from CISAS and won both in part.

I was awarded the cancellation, unlock code and £100 compensation.

The only thing changed was the cancellation date was 14 days on from the txt date as I would have had to give 14 days notice.

All in all I regard this as a close enough to total win.

The adjudicator in this case was [TEXT REMOVED BY FORUM TEAM]. Can someone please update the score card?

boatman

Interesting to note that OFCOM claim:
'Ofcom does not have the resources to pursue every case in which a provider may have breached GC 9.6 and/or used unfair terms.'

But i think it would be reasonable for OFCOM to ensure that the T&C's issued by the 4 main mobile companies comply would it not? Clearly in the case of T-Mobile they have not issued legally enforceable contracts and as such it is OFCOM's legal responsibility to act, something they have not specifically done. They have allowed T-Mobile to continue without issuing a letter to all customers telling them all they are incompetent and people can leave. OFCOM have just issued a slap wrist and let them get away with it, a complete joke!!

RandomCurve

boatman wrote: »

Interesting to note that OFCOM claim:
'Ofcom does not have the resources to pursue every case in which a provider may have breached GC 9.6 and/or used unfair terms.'

But i think it would be reasonable for OFCOM to ensure that the T&C's issued by the 4 main mobile companies comply would it not? Clearly in the case of T-Mobile they have not issued legally enforceable contracts and as such it is OFCOM's legal responsibility to act, something they have not specifically done. They have allowed T-Mobile to continue without issuing a letter to all customers telling them all they are incompetent and people can leave. OFCOM have just issued a slap wrist and let them get away with it, a complete joke!!

I'll be putting a reply to send to Ofcom, as in their usual manner they have side stepped the issue "the evidence available to us" what evidence did they have (seems to be a direct quote from EEs reasoning for changing T&Cs); who reviewed it how did they conclude it was not of Material Detriment. The key is to get media interest in this as Ofcom will keep trying to brush us off - if we keep coming back at them they will have to do something.

RandomCurve

rachx21 wrote: »

Morning all, this may sound like a silly question but I won my case but received a letter from EE this morning asking for payment for my last bill as they didnt recieve it this bill was after I had the won the cisas case so guessed I dont need to pay any bills as I won.just checking that is the case. Thanks

Best to pay everything as it falls due and then claim it all back as per the CISAS ruling, otherwise EE will trash your credit score and you will have a hard time forcing EE to correct the records.

lspeers

I have yet to receive PAC yet EE have already calculated sum to be back transfered upon port. ? Quite confused tbh do I pay June 24th bill or no.


We write further to receipt of notification of your acceptance of the Decision in relation to the above matter.



We confirm therefore that we have arranged for a PAC code to be provided to you and for your account to be taken out of commitment so that no cancellation charges will be applied to your account upon your porting to another provider. We confirm that we have also arranged for a request to be sent to the manufacturer of your handset in order for them to provide us with an unlocking code, which upon receipt we will provide to you by way of email.



We also confirm that we have arranged for the sum of £313.62 to be refunded to you (£100 compensation and £213.62 backdated charges to 3 March 2014) and we confirm that any further charges applied to your account will be waived. This refund will be paid to your bank account by way of BACS (account ending 149, sort code ending 26).



We hope that your acceptance of the Decision brings your complaint to a satisfactory close.

g6jns_2

RandomCurve wrote: »

I'll be putting a reply to send to Ofcom, as in their usual manner they have side stepped the issue "the evidence available to us" what evidence did they have (seems to be a direct quote from EEs reasoning for changing T&Cs); who reviewed it how did they conclude it was not of Material Detriment. The key is to get media interest in this as Ofcom will keep trying to brush us off - if we keep coming back at them they will have to do something.

Surely the time for dealing with OFCOM direct has passed. It is time the Parliamentary Ombudsman was involved. AIUI complainants can now make a case direct and don't have to do this via an MP. However from a tactical point of view I am unsure which route is best. OFCOM do not, AIUI, have the right to blame lack of resources because they have a statutory duty to carry out proper and timely scrutiny of phone companies. Keep up the good work Random curve.

Former_MSE_Andrea

Hi everyone!

We’ve been contacted by the CISAS adjudication service. It has asked us to remind users that all details of adjudications, including the names of adjudicators and the decisions must be kept confidential - something you agree to when applying to use CISAS.

Here at MSE we fight your corner as a consumer and we believe mobile operators should be more transparent in how they notify customers of price increases. The problem we face is when people post details of CISAS adjudications and post personal details about the parties involved, which we have to remove when reported. As your posts may include other useful information please help us keep them up by not including those details.

Thank you

MSE Forum Team

SimonD316

MSE_Andrea wrote: »

Hi everyone!

We’ve been contacted by the CISAS adjudication service. It has asked us to remind users that all details of adjudications, including the names of adjudicators and the decisions must be kept confidential - something you agree to when applying to use CISAS.

Here at MSE we fight your corner as a consumer and we believe mobile operators should be more transparent in how they notify customers of price increases. The problem we face is when people post details of CISAS adjudications and post personal details about the parties involved, which we have to remove when reported. As your posts may include other useful information please help us keep them up by not including those details.

Thank you

MSE Forum Team

Initially I did quote my full decision but quickly noted the part about keeping it the details confidential, so I removed it.

I do however think we should be able to note the outcome and the adjudicator as this allows people to see if certain adjudicators are going with, or against the trend.