EE/Orange/T-Mobile - Reclaim ALL price rises AND cancel contract re T&C change - 2

RandomCurve

Having fully read the defence it is WORD for WORD (even the paragraph numbers*) the same on the substantive points for the change in T&Cs that EE LOST (97%) on when they originally changed the T&Cs.
They have also "Copied and pasted" parts of their May 2014 price rise defence (where they lost 75% of cases)

EEs attempts to stop CISAS hearing the case are all old ones and can be easily dealt with, but there is one statement which causes me some suspension (relating to the refund of prior price increases) as follows:

. The Respondent remains of the view, and as previously stated by CISAS, that the decision to increase its prices is a business decision and falls outside the remit of the Scheme.

I have seen the EE defence and CISAS response, to the May 2014 price rise - and at no point did CISAS stop any cases on the basis that a price rise is a business decision - HOWEVER for the March 2013 price rise EE DID use this tactic which CISAS initially agreed with, however Ofcom stepped in and said CISAS had to take the cases! So the question is - have EE been holding new SECRET talks with CISAS???

Still lucky for us I have a history with these tricky bunch of Vipers and will remind CISAS of Ofcoms intervention in 2013!

I will try and get a defence prepared by the end of the weekend!


* Just spotted that the new defence para numbers go from 1 to 18 and then restart at 13 - clear evidence that EE have simply copied and pasted the original defence!
You can see the original defence (Para 13-32.4 and 33-36 being the identical ones) and the response to that defence at posts #616 and #617 and Post #687-#688 The new response will be near enough identical!
https://forums.moneysavingexpert.com/discussion/4888862

Mikmonken

I'd definitely be asking why CISAS allowed them an extension, I'm doubtful forgetting to submit a defence is an exceptional circumstance

RandomCurve

I have completed the response to the defence.


It highlighted a couple of issues with the actual CISAS case so I will amend that in due course (nothing that should stop us winning this case).


I will post the response below this post and on page 2 post #. I will also publish the response on the Fight Mobile Increases Website as a Word document as the formatting usually goes astry when copying to MSE (and I don't have the time to correct it) http://fightmobileincreases.com/fight-ee/complete-camapaign-against-ee/


@JoeJester - would you mind if I published the EE defence (I will take out personal details) so that others can cross reference the paragraphs (both here and on FMI)?


There are Four highlighted areas in the response that you need to review:
Two highlighted "pink" these refer to the change notification - I have used the EE 4GEE version - if you are on a different contract please change the pink highlighted area to the correct notification (it is on the original CISAS case on page 1)


A yellow highlighted area refers to the fact that CISAS have accepted these case before - it is a little risky putting this in and it is up to you if you take it out or leave it in (I would leave it in)


If you remove the yellow highlighted area you will also need to remove the area highlighted blue.


the blue highlighted area can be removed - it is a little more risky than the yellow area as it makes it clear to CISAS that they are being monitored - and they won't like that (like most low level life forms they prefer to hide under rocks where they can't be observed!)! I would personally leave that in, but it is relatively high risk in that CISAS may decide they can not carry on with your case in case you tell someone the outcome! Personally I would leave it in -but that is because I would be more than happy (would actually prefer prefer) to take this through a court process to try and get some publicity!

RandomCurve

EE defence response page 1 of 4:

General

I have in the main cross referenced my response to EEs defence by using the appropriate paragraph numbers ,however I think it is important to highlight that whilst EE have been at pains to reference their right to amend T&Cs under the contract, they have not addressed my claim with regards the UTCCRs, presumably as they are either ignorant of the rules (which proves EEs lack of professional diligence) or EE are deliberately trying to steer the adjudicator away from the UTCCRs as they have no defence to offer.


EE have not engaged on the Ofcom definition of Material detriment (pre January 23rd 2014) as being changes which hare not “beneficial to, or having a neutral impact on, a subscriber.”, nor have they engaged with my claim that under the USD 20/22 I have right to a penalty free cancellation for ANY modification under the contract. Further that as this is an EU directive if the member state law implementation does not give effect to the SAME END RESULT as the directive, then I can rely on the EU directive, therefore “Material Detriment” in GC 9.6 can really only mean ANY change to the contract.


Paragraph 1

EE state that they believe these claims fall outside of the remit of CISAS for a number of reasons; however I do not believe this is a correct position and the case clearly falls within the CISAS remit:

At Paragraph 1 EE submit that my claim is relation to EEs business decision to change the T&Cs and to increase prices. This is not factually correct – as a business EE is free to make whatever business decisions it wants to.

• My claim is that in not granting my request for a penalty free cancellation in regards to the change in T&Cs EE have breached the terms of the contract, Ofcom GCs and the UTCCRs.
• In respect of the price increase my claim is that the clause EE have relied upon is an unfair clause under the UTCCRs and is therefore unenforceable.
  And the ADR schemes were set up by Ofcom under S52-S54 of the Communications Act 2003 to consider these very arguments.
  
  Paragraphs 2 & 3
  At paragraph 2 &3 EE submit that under rule 2a and 2g CISAS can only deal with disputes regarding Bills or communications services – as my claim relates to the amount EE will bill me for the provision of telecommunications service it clearly is connected with both the billing for, and provision of telecommunications services, and therefore should fall within CISAS’ remit.
  Further Ofcom have confirmed that complaints relating to GCs and UTCCRs do fall within the scope of the ADR schemes as follows:
  (Email dated 17 July 2014 ref 1-265323635) “On your second question, I can confirm that the Ombudsman Service can accept complaints relating to GC9 and The UTCCRs as they are within the scope of its scheme.” Please contact Ofcom for confirmation if necessary.
  
  Paragraph 10
  This is precisely the nub of my case – I was provided with a copy of the T&Cs and I entered my contract based on those T&Cs which contained a price variation which triggered my right to a penalty free cancellation if EE applied a price increase higher than the LOWEST published inflation rate, EE have now updated the clause – without informing me of my right to a penalty free cancellation – to a clause that purports to only allow a penalty free cancellation if EE apply a rate higher than RPI. And on closer inspection (and as EE admit in their defence document at paragraphs 15(1), 19, 20,31 and 35.2) the original T&C is also unenforceable under the UTCCRs.
  
  Paragraph 12
  For the sake of clarity should the adjudicator decide in my favour the request for a backdated termination means that any sums taken from my account after that back dated date should be refunded (as there is no contract under which EE can apply charges), otherwise it would just be an immediate termination. Further it should be considered that had EE followed proper procedure and had not used unfair trading practices (Material distortion) then I would have cancelled my contract in February, and therefore the backdated cancellation should really be from March 2014.
  
  Paragraph 15 (1)
  EE state“….The amendment changed the circumstance in which a price rise gives the claimant an automatic right to terminate the agreement, without paying a cancellation charge…” (I contend that they were changed to my Material Detriment/Detriment (UTCCRs))
  I request that the adjudicator contrasts this statement in EEs legally prepared defence to the change notification that I received
  “We're making some changes to the terms and conditions for your 4GEE plan to give you more clarity on the notification of price changes. For more details and to download a copy please see http://www.ee.co.uk/termsrefreshv1 The new terms will take effect from 26 March 2014.”
  
  As can plainly be seen EE did NOT disclose the true meaning of the change they were making. a change to the “notification of price changes” (what EE told me at the time of the change) being substantially different to “amendment changed the circumstance in which a price rise gives the claimant an automatic right to terminate the agreement”
  Further EE continue at Paragraph 15 (1) to state “The amendment was introduced in light of recent Ofcom comments with the intention of increasing certainty for consumers…”. EE are being economical with the truth here - as per my claim document Ofcom actually said, that they were offering guidance to CPs as “Unfair terms are not legally enforceable against consumers….so it is in CPs interests…..to ensure the terms are fair”:
  
  
  http://stakeholders.ofcom.org.uk/binaries/consultations/addcharges/statement/Guidance.pdf
  This is industry guidance on unfair terms in contracts for communications services. It focuses principally on additional charges in consumer contracts, also referring to the obligation for communications providers to comply with General Condition 9 (contract terms)
  4. Ofcom expects CPs to review their terms in light of the Guidance and to amend or remove any that are unfair. Unfair terms are not legally enforceable against consumers (see Regulation 8(1)), so it is in CPs’ interests, as well as consumers,’ to ensure that terms are fair.
  
  So what EE are actually saying is that they realised that their price variation clause was not compliant with the UTCCRs (i.e. it was unenforceable) and so are attempting to change it to an enforceable clause. This raises two points:
  If the old clause was unenforceable EE could not apply any price increase to my account, and now potentially they can – so this has to be to my Material Detriment
  Secondly the Ofcom guidance was just that –there is no obligation for EE to change the term in current contract, i.e. the change was not a regulatory requirement.
  
  Paragraph 16
  I do not dispute that the contract contains a general right to change the terms of the agreement, but as the adjudicator will be are aware (and as stated in my CISAS claim) under the UTCCRs EE cannot give itself such a right:
  Schedule 2, paragraph 1, states that terms may be unfair if they have the object or effect of:
  
  (j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract.
  
  10.1 A right for one party to alter the terms of the contract after it has been agreed, regardless of the consent of the other party, is under strong suspicion of unfairness…….
  
  10.2 If a term could be used to force the consumer to accept increased costs or penalties, new requirements, or reduced benefits, it is likely to be considered unfair whether or not it is meant to be used in that way. A variation clause can upset the legal balance of the contract even though it was intended solely to facilitate minor adjustments, if its wording means it could be used to impose more substantial changes. This applies to terms giving the supplier the right to make corrections to contracts at its discretion and without liability.
  
  Clearly EEs change to its T&Cs forces me to accept increased costs and is being used to make a correction to the contract without liability (as EE clearly sate at Paragraph 15(1) that the change is being made to make the contract term enforceable.
  On both of these accounts under the UTCCRs I am entitled to a corresponding right to a penalty free cancellation – there is no Material Detriment test.
  
  Paragraph 17
  Please see my repose to Paragraphs 1 to 3
  
  Please note after paragraph 18 the paragraph numbers restart at 13 – I believe this is because EE have simply “copied and pasted” a defence that they sent CISAS in relation to a claim for termination based on the change in T&Cs that a friend of mine took to CISAS (it is word for word the same defence and paragraph numbers 13- 32.4 and 33-36) a case I might add that not only did CISAS accept as falling within its remit, but also Adjudicated in favour of my friend. In fact I am lead to believe that of approximately 100 cases over 90% were ruled in favour of the consumer.

Paragraph 13(2)

As per my response to paragraph 16 (1) above it is irrelevant if the contact contains this clause as it is an unfair term under the UTCCRs


Paras 14 (2) to 17 (2)
This is what the relevant terms state


Paragraph 18(2) & 19

This further demonstrates the ambiguity within the contract and why the change is of material detriment to me.

My reading of the clause is that it does not give EE the right to choose which statistic to use; it gives me the right to cancel penalty free should EE apply a rate higher than ANY PUBLISHED INFLATION RATE. It may b eth ateh adjudicator can find a third or four meanin too, and this just proves th epoit that EE are admitting that the old clause was ambiguous in that it does not clearly state the rate to be used or the month to be used – this is an unfair (and therefore unenforceable) clause under UTCCRs Group 13 as follows (and under OFT Group 7 regulations – “clear and intelligible language”:

Schedule 2, paragraph 1, states that terms may be unfair if they have the object or effect of:

(m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract.

13.5 Right to decide the meaning of terms. Similarly, if a supplier reserves the right to decide what a term in a contract means, then he is effectively in a position to alter the way it works so as to suit himself. It is not sufficient to say that the supplier will act 'reasonably'. Such a term gives rise to the same objections as a right to vary terms generally

Therefore the change in T&Cs moves the Term from being unenforceable (by EEs own admission at paragraphs 15(1),19, 20, 24, 31, 35.2) to a potentially enforceable clause which is to my material detriment.


EE have declined to comment on the regulatory meaning of “Material Detriment” under GC 9.6, but as per my case Ofcom have clearly stated in the Ofcom publication "Price rises in fixed term contracts” published on 23rd October 2013 at Paragraph 3.6:

3.6 Our intention was to reflect our general duties and principles of good administration and proportionality in particular. We sought, in light of these, not to rule out contract variations altogether. For example, those beneficial to, or having a neutral impact on, a subscriber.

Obviously replacing an unenforceable contract term (by EEs own admission throughout this defence Paragraphs 15(1),19, 20, 24, 31, 35.2) with a clause that is potentially enforceable, cannot be either to my benefit nor neutral on me, further it should be noted that GC 9.6 applies even if the change is only LIKELY to be of Material Detriment.

I note that EE have declined to comment on this definition of Material Detriment, and prefer to pretend that it does not exist.


Paragraph 20

It is very clear – I do contend this. Also I have identified another statistic - CPI and again this is further evidence of the unenforceability of the old contract term and hence why the change is likely to be to my material detriment. It also demonstrates EEs lack of duty of care and supports my claim for compensation, as my claim clearly articulates the difference between CPI and RPI, yet EE are claiming that I have not identified another statistic indicative of the stress causing behaviour that EE have employed throughout this episode.


Paragraph 21 – 23

This is the new clause


Paragraph 24

This may be true, but more importantly it reduces the circumstances in which I have a right to a penalty free cancellation, it moves the clause from being unenforceable (as per EEs defence Paragraph 15(1),19, 20, 24, 31, 35.2- i.e. EE would not have been able to apply a price increase at all) to a clause which is potentially enforceable, and purports to allow EE to apply a higher inflation rate than was previously the case (not withstanding that the old clause effectively meant that a price rise could not be applied to my contract).

It should also be noted that if EE were changing the T&Cs because they genuinely wanted to make them more certain (clear) they would have taken the opportunity to remove the term “Material Detriment” from the contract at clause 2.11.2 as this is the most ambiguous phrase in the entire contract. This must call into question EEs motivation in changing the price variation clause and should be seen as evidence supporting my claim that EE have not been acting in good faith and in compliance with the Unfair Trading Regulations.

Paragraph 25

Please see my response to Paragraph16 regarding UTCCRs Schedule 2 Paragraph1 (J)

Paragraph 28

This is factually misleading. Whilst Clause 2.11 “implements General Condition 9.6” there is no obligation on EE to use the term “material detriment” in their contract. That term was used in GC 9.6. which falls outside of the remit of the UTCCRs, however when used in a contract the term falls within the remit of the UTCCRs and therefore as a term in a contract it is not written in plain and intelligible language as required under UTCCRs – regulation 7 (Group 19) - 19.1 Regulation 7 states:

(1) A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language.

(2) If there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail

Paragraph 29

The change is of Material detriment:

It reduces my scope for a penalty free cancellation It gives EE a price variation that is potentially enforceable (the original term (by EEs own admission at Paragraph 15.1,19, 20, 24, 31, 35.2 being unenforceable), and purports to allow EE to use a higher inflation rate than was previously the case.

Paragraph 30.

This is factually incorrect and contradicts EEs own defence arguments at Paragraph19, as the old clause was RPI OR ANY OTHER statistical measure of inflation (e.g. CPI) not just RPI as EE have suggested here


Paragraph 31

Further evidence provided by EEs own legal team that the old price variation would not have been enforceable under the UTCCRs and hence why the change in T&Cs is of Material detriment to me.

RandomCurve

EE defence response page 2 of 4:

Paragraph 32.

The UTCCRs have no “Material Detriment” test therefore the mere fact that there is “Marginal detriment” means that under the UTCCRs I have a right to cancel my contract penalty free (Schedule 2, paragraph 1(j)). The EE legal team have a duty to apply a standard of professional diligence, and by not recognising their obligations under the UTCCRs in connection with varying contract terms they have effectively materially distorted the change notification which altered my economic decision (I.e. I did not apply for cancellation when EE first sent notification of the change).

Paragraphs 32.1 to 32.4

EE appear to have conflated what material detriment means in terms of a price rise and what Material detriment means in relation to a change in T&Cs, this case is in regards a change in T&Cs and so is dependent on the meaning of Material Detriment in that context (either contractually or regulatory) and the UTCCRs Group 19 regulation 7.

However as EE have raised the question (albeit irrelevant to determining what the term Material Detriment means) it should be borne in mind that under my interpretation of the old and new clause based on February 2014 inflation statistics the new clause allows EE to impose an increase higher than was previously the case (the old contract term was unenforceable and therefore the increase would be ZERO), alternatively if the contract capped EE at CPI then that increase is 59% higher than was the case before – 59% being materially detrimental.


Paragraph 32.5

EEs assertion that the difference between RPI and CPI is only 0.5% is misleading and not relevant.

It is misleading because the difference in percentage terms over the 24 months period is 19% (see table 1 below)

It is not relevant because:

1 – We are only concerned with the February 2014 figure (the one subsequently applied by EE) – which is 59% higher

2 – As the old clause is unenforceable the REAL difference should be between column RPI and Zero.


Table 1 – Trues Percentage difference between RPI and CPI

A: CPI

B: RPI

C: Percentage points Difference

Percentage difference

(C/A)

Mar-12

3.5

3.6

0.1

3%

Apr-12

3

3.5

0.5

17%

May-12

2.8

3.1

0.3

11%

Jun-12

2.4

2.8

0.4

17%

Jul-12

2.6

3.2

0.6

23%

Aug-12

2.5

2.9

0.4

16%

Sep-12

2.2

2.6

0.4

18%

Oct-12

2.7

3.2

0.5

19%

Nov-12

2.7

3

0.3

11%

Dec-12

2.7

3.1

0.4

15%

Jan-13

2.7

3.3

0.6

22%

Feb-13

2.8

3.2

0.4

14%

Mar-13

2.8

3.3

0.5

18%

Apr-13

2.4

2.9

0.5

21%

May-13

2.7

3.1

0.4

15%

Jun-13

2.9

3.3

0.4

14%

Jul-13

2.8

3.1

0.3

11%

Aug-13

2.7

3.3

0.6

22%

Sep-13

2.7

3.2

0.5

19%

Oct-13

2.2

2.6

0.4

18%

Nov-13

2.1

2.6

0.5

24%

Dec-13

2

2.7

0.7

35%

Jan-14

1.9

2.8

0.9

47%

Feb-14

1.7

2.7

1

59%

61.5

73.1

11.6

19%

Paragraph 32.6

Using EEs own example we can amply demonstrate just how Material the detriment is. The first thing to note is that under the old price variation clause the increase would have been ZERO so the actual Material Detriment is the difference between Zero and RPI = 97p per month and not the 15p that EE quote which is 547% higher than the figure EE quote ((97-15)/15*100). If it is accepted that EE could have used CPI previously then the difference (based on Feb 14 actual percentages used is 36p, which is 140% higher than EEs illustration ((36-15)/15*100)! Neither 140% nor 547% can be considered as immaterial.

In any case if EE truly believe the difference between CPI and RPI to be immaterial – why did EE decide to use RPI rather than CPI in its revised contract clause? Clear evidence the EE does in fact consider the difference t of Material Detriment (to them had CPI had been used).


Paragraph 33-34.3

Please see my response to Paragraph1 -3

Paragraph 35

If EE have made their contract complex, or have used complex and unintelligible language then this is evidence of EE not acting in good faith, and brings the protection offered to me as consumer under the UTCCRs into play.

To determine this dispute the following is required:

• An understanding of EEs T&Cs “old” and “new”
• An appreciation of the Unfair Terms in Consumer Contracts Regulations (UTCCRs), and
• A knowledge of Ofcom regulations and USD 20/22
• A knowledge of the Unfair Trading Regulations
• To be informed that the ONS has clarified that due to the calculation methodologies RPI will always result in a higher inflation figure than CPI.

All of which will be within the knowledge of an adjudication service tasked with adjudicating on disputes involving telecommunication providers. Therefore there are no complex issues of law involved.

Paragraph 35.1

CISAS do need to consider these things, but if any ONE of them shows that the change is LIKELY to be of material detriment (or detriment under the UTCCRs) then I should win my case as EE only need to breach one of the rules/regulations/laws and not all of them.





Paragraph 35.2


Further proof that the old clause was unenforceable, along with paragraphs 15(1),19, 20, 24, 31, 35.2 of EEs defence, which is conclusive evidence ta the change is likely to be to my material detriment.

RandomCurve

EE defence response page 3 of 4:




Paragraph 35.3


EE are keen to point out there is no guidance within GC9.6 as to what constitutes Material Detriment, but that meaning can be determined by understanding why the Term “likely to be of Material Detriment” was included within GC 9.6 and guidance from the source documentation of GC 9.6.





In the Ofcom publication “ Price rises in fixed term contracts - Decision to issue Guidance on General Condition 9.6”, Published in November 2013 Ofcom explain the rationale for including the term ““likely to be of Material Detriment” at paragraph 3.6 as follows:





“…..Ofcom and, before us, OFTEL has included a material detriment requirement in the relevant part of GC9. Our intention was to reflect our general duties and principles of good administration and proportionality in particular. We sought, in light of these, not to rule out contract variations altogether. For example, those beneficial to, or having a neutral impact on, a subscriber.”





So to determine if this change is likely to be of Material Detriment to me we only need to consider if the change is beneficial or neutral to me. Obviously if an impact of a T&Cs is neutral (both for the company and the consumer) then there is absolutely no point in EE going to the trouble and expense of making the change (apart from legislative reasons – which are not factor in this case). In this case the benefit is not neutral as whilst I may benefit from having clearer T&Cs that benefit is outweighed by the benefit accruing to EE in that I now have less scope to challenge EE on future price increases, so the “neutral” element can be discounted in this case. This only leaves the question of if the change is to my benefit, and if it is not to my benefit then – by Ofcom’s definition – it is to my material detriment.





Indeed EEs own defence at paragraph 24 “..reduces the scope for disputes regarding whether a price change gives rise to a right to cancellation”, and at Paragraph 32 of the defence EE concede that there may be a marginal determent “ ....to the extent that the claimant has suffered any marginal detriment, such detriment is not material”. Both provide evidence from EEs own legal team that the change is neither neutral in its impact or to my benefit. Along with Paragraphs 15.1,19, 20, 24, 31, 35.2.





Looking at the source document for GC 9.6 – which is USD 20/22 then the EU directive clearly states that ANY change in the T&Cs gives rise a penalty free cancellation, and Ofcom GC 9.6 can only override that (if at all) by allowing changes that are BENEFICIAL or NEUTRAL as any other change would be detrimental to me and not allowed. Whilst member states have flexibility in how they implement EU Directives, the END RESULT must be the same as the EU Directive intended, if not I can rely on the EU Directive over GC 9.6.





As regards to the contractual context EE appear to be relying on the fact that the term Material Detriment” “..is not defined explicitly in the agreement” However as we are now considering the contractual context of the term the protection of the UTCCRs is available. The UTCCRs are clear that in a standard form contract between a business and a consumer where a term is not written in plain and intelligible language the meaning most advantageous to the consumer should be used:





Under the UTCCRs Group 19 Regulation 7 states that:

(1) A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language.
(2) If there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail but this rule shall not apply in proceedings brought under Regulation 12.





Given that EE have failed to define Material detriment in the standard form contract which they wrote (as admitted by EE) then the meaning of “Material Detriment” is a purely subjective meaning – we can all understand the words, but we may not be able to agree on their meaning. Therefore under UTCCRs regulation 7 the interpretation most favourable to me – the consumer - should prevail, and my interpretation of Material detriment is any change that is not to my benefit (which is a slightly higher test than that required under Ofcom’s rationale at GC 9.6, but is in line with USD 20/22) as to my mind even a change that appears to be neutral is in fact unlikely to be to my benefit as EE directors have a duty of care to the company and incurring expense to change a T&Cs for a neutral impact would not be consistent with discharging that duty of care





Paragraph 35.4


This is factually incorrect as EE say “..it is not sufficient simply that it is theoretically possible that the change could be of some detriment to the claimant….” The GC9.6 only applies a test of LIKELY to be of Material detriment, and Ofcom have defined Material detriment as” not being to my benefit or neutral in its impact.





Paragraph 36


EE have totally ignored the laws (UTCCRs) and Regulations (GC 9.6) that they are subject to, and seem to be saying that if they put something in their contract – however non-compliant that may be – then I have to abide that. This is a standard form contract and I am in a captive period, and it is preciously because of this sort of attitude/behaviour that the rules, laws and regulations have been put in place to protect me.








Paragraph 37


Given that EE have proved in their own defence at Paragraphs 15.1,19, 20, 24, 31, 35.2 that the old clause was unenforceable, and state that the new clause is enforceable. And given that the new clause purports to allow a higher price increase to be applied to my account than was previously the case


Then I think that the case for the change in T&Cs does give rise to my right to a penalty free cancellation has been made (under the contract (UTCCRs), and GC9.6 and USD220/22


EE are now trying to claim that the penalty free remedy is not available to me as I did not seek to cancel the contract before they applied a price increase under the new term.


Had EE been open and honest, acted in good faith and complied with Ofcom guidance on notification of non-price change changes in T&Cs and not breached the Unfair Trading Regulations, then EE might have a valid point. However EE have not:


Been open and honest;


Acted in god faith


Complied with Ofcom guidance,


And have breached the Unfair trading Regulations.





I note that EE have not addressed any of the points in my CISAS case regarding the notification deficiency that renders EEs claim at paragraph 37 void.





The Unfair trading practices regulations state that:





3 General prohibition
3.3 Regulation 3 contains a general prohibition of unfair commercial practices.
3.4 A commercial practice is unfair if:
• it is not professionally diligent, and
• it materially distorts, or is likely to materially distort, the economic behaviour of the average consumer. Essentially, for the general prohibition to apply, the trader’s practice must be unacceptable when measured against an objective standard and must also have (or be likely to have) an effect on the economic behaviour of the average consumer.
The second condition is likely to be met if, for example, because of the practice, the average consumer would buy a product they would not otherwise have bought, or would not exercise cancellation rights when otherwise they would have done so.





As per my case EE should have known the true implications on me of changing the T&Cs –moving the clause from an unenforceable clause under the UTCCRs to a potentially enforceable one, and allowing EE to apply a higher price increase then was previously the case without triggering my right to a penalty free cancellation. However EE did not make this clear in their notification of the change to me and this has caused me to take a different economic decision – I.e. I would have cancelled my contract immediately.





EE must have been aware of the true impact and EE admit as much in their defence at paragraph 15 (1) where EE now state“….The amendment changed the circumstance in which a price rise gives the claimant an automatic right to terminate the agreement, without paying a cancellation charge…” This is in stark contrast to the notification which said:


We're making some changes to the terms and conditions for your 4GEE plan to give you more clarity on the notification of price changes. For more details and to download a copy please see http://www.ee.co.uk/termsrefreshv1 The new terms will take effect from 26 March 2014.





As can plainly be seen EE did NOT disclose the true meaning of the change they were making. I was lead to believe that they were clarifying the notification methods – email, text, post, and possible the dates when notifications would be made, there was no suggestion that the actual inflation rate being referenced was being changed, or the legality of the clause (under the UTCCRs) was being changed – had EE done so I would have requested a penalty free cancellation in February 2014 – and I ask the adjudicator if due to EEs breach of the Unfair Trading Regulations a penalty free cancelation should be back dated to March 2014.





Further Ofcom guidance states that when changing T&Cs (other than price rise notifications) the content of the notification should be as follows (page 85 of Ofcom publication “Price rises in fixed term contracts”) http://stakeholders.ofcom.org.uk/binaries/consultations/gc9/statement/GC9_statement.pdf:





Content of notification


A1.19 The notification must be clear and easy to understand. For example, it should make the subscriber aware of the nature of the contract modification, the likely impact on him/her, and, where relevant, set out clearly what action the subscriber can take to avoid the impact, should he/she wish to.





A1.20 Information about the subscriber’s termination rights should be made clear upfront. For example, on the front page of a hard copy notification, in the main email message rather than via a link in the message or on the actual webpage of the modification notification rather than via a link to another page.





The notification received clearly does not comply with Ofcom regulations.


Given the breach of both the Unfair Trading regulations and the Ofcom rules on notification content then EE should not be allowed to deny me my rights by their deceitful behaviour. Indeed the adjudicator should consider if a penalty free cancellation backdated to March 2014 would be appropriate.





Given that the notification was not in the proper format and was misleading as to the nature of the change, I cannot be deemed to have received notification of the change – and therefore any time limit that EE try to rely upon should be void.





Paragraph 38 – 43


This is further proof of how EE do not respond to the questions being posed, and this causes strees and warrants compensation). EE have gone to great lengths to explain how the RPI rate they have used is complaint with the contract and therefore does not give rise to a penalty free cancellation.





I have not made a claim as to whether or not the right RPI has been used, or if I can have a penalty free termination due to the price rise. My claim is that under the UTCCRs the price variation clause is unenforceable and that any sums taken over and above the originally agreed price should be refunded.


I request that the adjudicator considers my request to have sums refunded by reference to the following UTCCRs which are stated in my CISAS claim. For ease I have copied the relevant one below – note that EE have not responded to any of these points.





The level and timing of the price increases is not specified within narrow limits – if not precisely, within the contract.

One of the tests of fairness in the UTCCRs is contained in the Office of Fair Trading (OFT) guidance at 12.4 (Schedule 2 Paragraph 1 (L)) as follows:

12.4 A degree of flexibility in pricing may be achieved fairly in the following ways.

• Where the level and timing of any price increases are specified (within narrow limits if not precisely) they effectively form part of the agreed price. As such they are acceptable, provided the details are clearly and adequately drawn to the consumer's attention.





I ask the adjudicator to see if they can determine from the new clause – at paragraph 22 of EEs defence:


Which months RPI will be used


When the increase will be effective from


How many price rises I will be subjected to in my 24 month contract (I make it 0, 1, or 2)

RandomCurve

EE defence response page 4 of 4:

The price variation is discretionary (capped by RPI, but not linked to anything at all)
UTCCRs Schedule 2 Paragraph 1 (L)
OFT rules say that a price variation cannot be discretionary:
12.2 Any purely discretionary right to set or vary a price after the consumer has become bound to pay is obviously objectionable. That applies particularly to terms allowing the supplier to charge a price on delivery of goods that is not what was quoted to the consumer when the order was placed. It also applies to rights to increase payments under continuing contracts where consumers are 'captive' – that is, they have no penalty-free right to cancel.
UTCCRs Schedule 2 Paragraph 1 (J)
OFT rules say that variation clauses cannot be used to suit the interests of the supplier.
10.3 (b)it can be exercised only for reasons stated in the contract which are clear and specific enough to ensure the power to vary cannot be used at will to suit the interests of the supplier, or unexpectedly to consumers
The EE price variation clause makes no reference to the circumstances that may give rise to EE increasing its charges, it merely states that EE can increase its charges – it is therefore discretionary. I put EE to strict evidence to show where in the contract the grounds/reasons for applying a price increase are explained.
Whilst the contract states charges can be increased there is no reference as to the grounds on which charges can be increased, hence why it is a discretionary price increase. The fact that EE places a vague limit on the price variation (RPI or any other statistical measure of inflation) does not indicate that EE can only increase prices if EE's costs increase. There is a World of difference between:

• Increasing prices due to cost increases incurred by EE and
• Increasing prices in line with RPI/CPI

Therefore EE has attempted to give itself a discretionary price variation clause to allow it to suit its own interests by applying an increase to the contract price (RPI) to a “captive consumer” that needs not bear any relation to increases in EE’s costs of carrying out our contract. Therefore the clause should be held to be unfair and unenforceable.

The price rise has not been used for the purposes stated in the contract

The price rise letter attempts to explain that the price rise is “Due to Inflation”. I put EE to strict Proof* that the costs of administering my contract have increased by RPI over any 12 month period where EE have applied an RPI increase and that those pressures are over and above any inflationary pressures already factored into the initial price set by EE.

*The burden of proof lies with EE to prove that EE’s costs have indeed risen as stated and not on me to prove that they have not:

UTCCRs Schedule 2, paragraph 1, states that terms may be unfair if they have the object or effect of:(q) ………., unduly restricting the evidence available to him or imposing on him a burden of proof which, according to applicable law, should lie with another party to the contract.


Additionally the major cost components of my contract were incurred before the contract was taken out or have decreased substantially:

• The cost of the hand set was incurred before I took out my contract and therefore should have no inflation associated with it
• The Cost of the 3G network was incurred in April 2000 and so cannot therefore have inflation associated with it
• Any profit element within the contract price cannot have inflation applied to it under the UTCCRs
• Call termination charges – which are fixed and agreed and published in advance by Ofcom and have decreased over the past few years by over 50%.

Therefore it is highly unlikely that EE’s costs have increased by RPI over and above any inflation initially factored into my contract price then there are no grounds (other than a profit motive) for EE to increase the price of my contract and therefore the clause should be held to be unfair and unenforceable.

Additionally further evidence that the price increase is not linked to EEs actual cost increases can be found EEs response to my email. In that email EE state:
“….we are committed to investing significantly in our network ….”
Investing in the network has nothing to do with maintaining the network and running my contract.
As an RPI price increase cannot possibly be a reasonable reflection of the actual costs increases incurred in running my contract it cannot have been used for the purposes stated in the contract (notwithstanding the fact that there are no reasons given in the contract - that is why it is discretionary) and should be deemed as unfair and unenforceable,

The price rise has not been used for the purposes stated in the letter.
The price rise letter attempts to explain that the price rise is“Due to Inflation”, as follows:
“Why are you increasing your prices? - Due to inflation, which DIRECTLY IMPACTS the costs of running our business we’ve had to re-evaluate out prices and introduce an increase…..”
And
“Where did this increase come from? – We’ve used the RPI which …. is a measure of the increase in prices for consumers and businesses on average across the country over the last 12 months”
I believe that the use of RPI is flawed statistic in its use in this contract and is not a suitable proxy of EE’s costs as the price rise letter states. The RPI is based on a basket of goods which has little – if anything – to do with the costs incurred by EE as it includes:

• Food/Beverages
• Tobacco
• Alcohol
• Clothing
• Holidays
• Toys
• Sports Equipment

Therefore I do not believe that RPI is a relevant statistic as per UTCCRs Schedule 2 Paragraph 1 (L) -OFT guidance 12.4 which states that a term may be fair if:
• Terms which permit increases linked to a relevant published price index such as the RPI are likely to be acceptable
The guidance cites RPI as an example –it does not say that RPI is a relevant statistic in all cases. In this case the ONS provides Service Provider Price Indices for specific industries including Telecommunications; this would have been a better approximation of EE’s costs. This statistic is published by the ONS and the relevant indices show that telecommunications costs have DECREASED since Quarter 2 of 2009:
Services Producer Price Indices, Quarter 1 2013 ONS published 22nd May 2013
Business telecommunications
Annual rate -0.4 %, up from -8.9% last quarter. Last higher in quarter 2 2009 (0.7%). Quarterly rate 0.0%, up from -2.3% last quarter. Last higher in quarter 2 2012 (2.1%).
As most indicators (including EE’s own accounts) suggests that operating costs for EE have decreased over the years then there is no basis for EE to claim that the basis of the price increase is due to inflation that “DIRECTLY IMPACTS” on its costs. Therefore the price rise should be declared unfair and unenforceable as it is not being applied for the reason stated in the price rise letter (and of course there is no reason stated in the contract – as this is a discretionary – and hence unfair clause).


EE’s is transferring the risk of inflation to me – which it is better able to control or anticipate than me.

EE is required to take reasonable care when setting up the contract (including the price) and EE cannot transfer inappropriate risks (e.g. inflation) to me as per UTCCRs Schedule 2 Paragraph 1 (L) OFT guidance 12.3 and OFT guidance Group 18 clauses – 18.2.1:

12.3 A price variation clause is not necessarily fair just because is not discretionary – for example, a right to increase prices to cover increased costs experienced by the supplier. Suppliers are much better able to anticipate and control changes in their own costs than consumers can possibly be. In any case, such a clause is particularly open to abuse, because consumers can have no reasonable certainty that the increases imposed on them actually match net cost increases

18.2.1 A contract may be considered unbalanced if it contains a term the supplier is better able to bear. A risk lies more appropriately with the supplier if:

• It is within their control

• …….

18.2.2 Particular suspicion falls on any term which makes the consumer bear a risk that the supplier could remove or at least reduce by taking reasonable care

Proof that EE should be able to mitigate the risk of inflation can be found both by looking at the environment in which EE operate and EEs statement to Ofcom during Ofcom’s review of price variation clauses conducted in 2013.

Operating Environment:

The background to EE and the UK Mobile market is:

• The UK Mobile market is a mature market (20+ years);
• EE (including its predecessor companies) has over 20 years’ experience within the market
• The Contract is short term; and
• The UK economy has been stable over the last few years (no hyper or unexpected inflation).

In a short term contract either:

• EE HAS factored anticipated inflationary pressures into the initial price of our contract – in which case the price variation clause is not being used for the purpose stated (OFT 10.3b) and is being manipulated to suit the interests of EE (OFT 10.3 (b) and is therefore unenforceable.
  OR
• EE HAS NOT factored in potential cost pressures into the initial contract price when EE is best placed to control and anticipate them – thereby demonstrating that EE has not taken reasonable care when setting the initial contract price (OFT 18.2.2) has not applied the required professional diligence (UTRs), and is attempting to transfer an inappropriate risk to me (OFT 18(b) 18.2.1 and 12.3). The price variation clause would therefore be unenforceable.

In our short term contract drawn up by EE (an experienced market player –with the majority market share) in a mature market, in a stable economy EE should have factored inflationary pressures into the initial price of our contract. If EE has then there is no basis for a midterm price increase, and if it has not then it has failed in its duty of care, but either way the price variation fails the test of fairness under the UTCCRs.
As far as I can tell EE are better placed than I am to control and anticipate likely costs increase in its business over a 24 month period. EE can control/anticipate:

• Pay increases to its staff,
• Cost increases associated with leases
• Maintenance costs
• Call termination charges – which are fixed and agreed and published in advance by Ofcom and have decreased substantially over the years.
• Cost of the “spectrum” was incurred in April 2000 and therefore not subject to any cost increase.
• The cost of the handset – which was incurred before the contract started and therefore cannot be subject to inflation
• Utility charges

EE statements to Ofcom:
In the Ofcom publication “Decision to issue Guidance on General Condition 9.6
Non-confidential version” Publication date: 23 October 2013, EE are quoted at paragraph 4.56 as follows:

4.56 EE agreed that operators are able to forecast a number of cost categories related to their own network and operations reasonably accurately. However, it said CPs are also subject to price increases and, in particular, energy costs, costs of sites, rent for its retail shops and commercial rates have all gone up significantly over the past year (and some of these costs had risen faster than RPI). EE said that operators should be able to pass on to customers any costs or revenues that they are unable to accurately plan e.g. regulatory decrease of certain revenue streams such as wholesale mobile termination rates.

Clearly the UTCCRs do allow the recovery of lost revenues, only cost increases (in limited circumstances), and as EE have clearly stated that they are able to anticipate a number of cost categories in my contract, then they have either been negligent in not so doing, or are double counting inflation associated with those elements where EE have already factored in inflation. Even shop rents/ energy prices EE should be capable of making an informed estimate of likely increases, or mitigating risks by hedging energy costs or negotiating better lease terms/looking for different premises for example.

Given the above two scenarios above (Operating environment and EEs statements to Ofcom) I am at a loss as to what cost increases EE never anticipated when setting the initial contract price? As EE appear to have failed in their duty of care, and not applied the Professional Diligence expected (UTRs) when setting the initial price they cannot transfer the risk to me and therefore the price rise should be held to be unfair and unenforceable.


Paragraph 44

My understanding of the CISAS process is that it is supposed to be independent and I am supposed to see all communications in connection with my case between CISAS and EE. EE state here “The Respondent remains of the view, as previously stated by CISAS, that the decision to increase its prices is a business decision and falls outside the remit of the Scheme”

This suggests that there have been secret communications between EE and CISAS which have not been disclosed to me.

However I am aware that when T-Mobile increased their prices in March 2013 a large number of consumers took cases to CISAS. Initially CISAS did mistakenly believe that the case fell outside of its remit due to EE claiming that cases related to its’ business decision, however I am also aware that CISAS were contacted by Ofcom and subsequently agreed that the cases (like mine) were in connection with the enforceability of the contract clause under the UTCCRs and NOT the business decision to increases prices, and CISAS subsequently reinstated the case. I am aware that Ofcom (as am I) remains of that view – see my response to paragraphs 2 and 3

Paragraph 45

Further evidence of EEs lack of Professional diligence, should the adjudicator agree that the price variation clause is deficient under the UTCCRs then I do have right to the remedy to maintain the original contract price.

Paragraph 46

Please see my response re Professional diligence and Material distortion – breach of Unfair Trading Regulations – at paragraph 37


Paragraph 47

This is factually incorrect -the correspondence is attached to my CISAS claim – it is clear that EE have not responded to the points made (in deed even in this defence they have ignored over 50% of the points raised –further evidence of the stress caused by EE not responding to the legitimate questions being posed). There is also clear evidence of EE breaching Ofcom GC 14 in EEs refusal to issue a deadlock reference. It is also clear how my claim for compensation is derived.

Paragraph 49

Please see my response to paragraph 37 and also note that yet again EE have declined the opportunity to counter my arguments re breach of the Unfair Trading regulations.

MrJester

RandomCurve wrote: »

I have completed the response to the defence.


It highlighted a couple of issues with the actual CISAS case so I will amend that in due course (nothing that should stop us winning this case).


I will post the response below this post and on page 2 post #. I will also publish the response on the Fight Mobile Increases Website as a Word document as the formatting usually goes astry when copying to MSE (and I don't have the time to correct it) http://fightmobileincreases.com/fight-ee/complete-camapaign-against-ee/


@JoeJester - would you mind if I published the EE defence (I will take out personal details) so that others can cross reference the paragraphs (both here and on FMI)?


There are Four highlighted areas in the response that you need to review:
Two highlighted "pink" these refer to the change notification - I have used the EE 4GEE version - if you are on a different contract please change the pink highlighted area to the correct notification (it is on the original CISAS case on page 1)


A yellow highlighted area refers to the fact that CISAS have accepted these case before - it is a little risky putting this in and it is up to you if you take it out or leave it in (I would leave it in)


If you remove the yellow highlighted area you will also need to remove the area highlighted blue.


the blue highlighted area can be removed - it is a little more risky than the yellow area as it makes it clear to CISAS that they are being monitored - and they won't like that (like most low level life forms they prefer to hide under rocks where they can't be observed!)! I would personally leave that in, but it is relatively high risk in that CISAS may decide they can not carry on with your case in case you tell someone the outcome! Personally I would leave it in -but that is because I would be more than happy (would actually prefer prefer) to take this through a court process to try and get some publicity!

Amazing stuff thank you RC. Could you possibly email me across this defense? The formatting will be all over the place otherwise did you make it in a .doc originally?

Feel free to publish their defence in my case but just there's a lot of personal info so please blank it out and send it to my email so I can double check first?

Maccadinho25

Hi all,

Dont mean to hijack but im wondering what my next move is.

I followed the guidance on page 8 on the 4th October and did the following:

Emailed Lynn Parker explaining my circumstances and having no response from CISAS - no response received to date

Sent an official complaint to IDRS and received absolutely nothing back to date

Emailed Graham Massie and received a response stating he will respond with ten working days which expires in 2 or 3 days

Does my email to Graham Massie essentially supersede my complaint to IDRS or should i at least be getting some acknowledgement from IDRS?! Or just wait for Grahams response?
These companies are so unorganised they're tripping over themselves now!

Mikmonken

Maccadinho25 wrote: »

Hi all,

Dont mean to hijack but im wondering what my next move is.

I followed the guidance on page 8 on the 4th October and did the following:

Emailed Lynn Parker explaining my circumstances and having no response from CISAS - no response received to date

Sent an official complaint to IDRS and received absolutely nothing back to date

Emailed Graham Massie and received a response stating he will respond with ten working days which expires in 2 or 3 days

Does my email to Graham Massie essentially supersede my complaint to IDRS or should i at least be getting some acknowledgement from IDRS?! Or just wait for Grahams response?
These companies are so unorganised they're tripping over themselves now!

you've logged a complaint with the IDRS so that's good, the email to Graham Massie is essentially escalation, wait to see what he has to say, but don't expect anything other massively different from every other complaint we've raised so far.

For what it's worth I've i'm a step or two further along, i've positioned the complaint hopefully in such a way that CISAS have to reopen our claims or compensate (or ignore me completely)

The crux of the response i've had so far is...

CISAS - have published rules which we only see at a high level. This means that EE can and have objected to the complaint, but even these rules state that a consumer can and should be able to comment (we haven't been able to)

CISAS are going to rewrite their rules so they aren't as confusing and ambiguous for the consumer . - quite patronising really considering the rules are pretty straight forward, it's just CISAS and EE that don't seem able to follow the rules.

I'm hoping i don't have the need to call and chase the guy up for a response, as it's getting pretty ridiculous now considering the amount of time they have had on the complaints.