EE cancellation charge at end of contract

Timothea

I had a 24-month phone contract with EE that was due to finish on 22 June 2018. I called their customer services in early June to discuss going on to a 30-day rolling SIM-only contract when my current contract expired. For a 1-GB data plan, they quoted £14 per month! I pointed out that I could get a better deal for £6 per month, and the agent managed to get approval to match that price.

However, as the other deal was still better for me, I told the agent that I would let my contract run out and requested a PAC, which I received. A week before my contract ended, I took out a new SIM-only contract with another company and, once I received the SIM, I sent them the PAC. My number was successfully transferred a couple of days before my old contract ended. That's all sorted, I thought.

Today, I received a final bill from EE; not for out-of-plan charges but for early cancellation of my contract! This bill credited me £2.41, which was three days' credit on my monthly plan charges, but debited me £11.33, which was an early contract cancellation charge (VAT Exempt). I have now managed to get this credited, but it raises the question of why this happened. EE won't say. Just to summarise:

1. EE collected my final contract payment on 31 May
2. I notified EE that I was going to let my contract run down
3. I transferred my number to a new service provider three days before my contract ended

There is no justification for EE treating this as an early cancellation, even if I hadn't notified EE, because the contract had been fully paid before my number was transferred. What I did must be the norm when people change service providers, to ensure the minimum down-time, so how many people have been duped into paying it? Thousands? Millions? I have cancelled my Direct Debit, just to be sure.

I am also aware that EE doesn't automatically reduce the monthly charge when the phone has been fully paid for. This appears to be a company that will use every trick to rip off customers. Be very careful.

mobilejunkie

What makes you think you "pay the phone off?" It is classed as a free gift with paid for air time over a minimum term. I'm no fan of any of the networks and have recently had a formal complaint with EE, so an EFT isn't justified. (not sure how PACs work for the 3 days early transfer - but 3 days is the most they could charge under any circumstances and I doubt they could charge anything).

You have a lot of (common) misconceptions about mobile contracts. They don't "come to an end" unless you give 30 days' notice OR request (and use within 30 days) a PAC. Contracts are not "due to finish"; they merely reach the end of the minimum term and continue as before until you do one of the above (or they give you 30 days' notice of termination, which is of course highly unlikely.

Timothea

mobilejunkie wrote: »

What makes you think you "pay the phone off?"

1. Because I understand that some other mobile phone providers separate the handset from the calls, texts and data on their bills (O2?).
2. Because that's how contracts are priced up: the handset cost is spread over the contract term then the cost of the monthly usage allowances is added, plus a profit margin.

mobilejunkie wrote: »

They don't "come to an end" unless you give 30 days' notice OR request (and use within 30 days) a PAC. Contracts are not "due to finish"; they merely reach the end of the minimum term and continue as before until you do one of the above (or they give you 30 days' notice of termination, which is of course highly unlikely.

1. I purchased a 24-month contract, as opposed to 30-day rolling contract, say. If the contract is something different then that should have been made clear to me when I purchased it.
2. The original agent said the contract would end if stopped using my EE SIM. Had I continued to use my EE SIM after the end of the contract then I would have expected EE to continue providing the same service (for a fee).
3. Because the second agent couldn't explain why I received the invoice that I did.

mobilejunkie wrote: »

You have a lot of (common) misconceptions about mobile contracts.

I agree with you, but who's fault is that? The Consumer Rights Act 2015 says that traders must be transparent about important consumer contract terms and that any failure to do so makes those terms unenforceable. Common misconceptions are, almost by definition, because the contract terms are not transparent to consumers.

Of course, consumers are very unlikely to argue such a case in a court of law, so big businesses will only back down when faced with a determined foe. The last thing they want is some case-law favourable to consumers to be established.

Another important point to note is that EE's "loss" by me terminating the contract 3 days early was either zero (because I had already make the final payment) or £2.41 but the cancellation charge was £11.33. As this charge was VAT Exempt, it must be "damages" rather than a contractual fee. In common law, damages can only be compensation for financial loss.

pmduk

Timothea wrote: »

I had a 24-month phone contract with EE that was due to finish on 22 June 2018.

This is what you have misunderstood. You had a contract with EE which had a minimum 24 month period which ended on 22 June '18. You were able to give 30 days notice to leave on or after that date. Your contract will say that reread it.

mobilejunkie

Timothea wrote: »

Because that's how contracts are priced up: the handset cost is spread over the contract term then the cost of the monthly usage allowances is added, plus a profit margin.

A costing exercise for the supplier - nothing to do with how a contract works.

Timothea wrote: »

I agree with you, but who's fault is that?

Yours. Although the law offers some protection it primarily assumes the purchaser has made at least some attempt to understand their own obligations of the contract they willingly enter into.

eDicky

Timothea wrote: »

I I told the agent that I would let my contract run out and requested a PAC, which I received.[/B]

Letting your contract 'run out' or 'run down' is a novel idea, but without meaning. Even if you gave thirty days' notice to end your contract, obtaining your PAC would then cancel that notice and your contract would continue if the PAC was not used within thirty days.

It's not clear in all this confusion what the £11.30 charge was actually for, but you had it reversed, perhaps as a goodwill gesture. I don't think you should be accusing EE of using 'every trick to rip off customers' when you have a very limited idea of how mobile contacts in general are terminated, regardless of network.

pmduk

It will have been cheaper to wipe the £11.30 charge than to argue with the customer unless the customer has been particularly rude.

Timothea

eDicky wrote: »

It's not clear in all this confusion what the £11.30 charge was actually for.

I do not dispute my ignorance around phone contracts; thank you for enlightening me. This problem arose because EE did not explain how the £11.33 was calculated, on the bill or by either of the customer service agents with whom I spoke. Had they done so then I would probably have let it go.

I have even worked out a plausible explanation for how this charge was calculated, which I won't bore you with.

simax

How soon after requesting the PAC did you use it? When asking for the PAC, it starts your 30 days notice. If you ported your number on day 15 for example, you be charged the remaining 15 days notice on your last bill.

boatman

simax wrote: »

How soon after requesting the PAC did you use it? When asking for the PAC, it starts your 30 days notice. If you ported your number on day 15 for example, you be charged the remaining 15 days notice on your last bill.

As Simax says, the £11 will probably be for the days of your PAC beyond the end of your 24 months. The PAC lasts for 30 days which you need to pay for, regardless of when you use it.
Also what they have a habit of doing if you give notice in the minimum term is to charge a month's line rental as an early termination charge, even though you have already paid for the line rental in advance, effectively charging you twice, they should then credit it back in the final bill, whether they do is another story, so the £11 could be this.

They don't seem to understand the difference between leaving in the minimum term and giving notice in the minimum term.
To me they should be like the energy companies, they are not allowed to charge a termination fee in the last 42 days of the contract, shame mobile companies are not the same.

simax

There was a period where there was a double charge when leaving before the end, but that was fixed last year.