Mobile Phone Contract - Price Rise Refunds

edited 14 May 2014 at 10:18PM in Mobiles
1.6K replies 135.2K views
RandomCurveRandomCurve Forumite
1.6K Posts
edited 14 May 2014 at 10:18PM in Mobiles
A new campaign group dedicated to fighting Mobile Increase has been set up (As of 15-05-14 it is still under construction) but please take a look:


http://www.fightmobileincreases.com/




I have begun this thread after participating in the following two forums:
  1. "T-Mobile Price increase"
    1. (relates to the May 2013 increase)
    2. http://forums.moneysavingexpert.com/showthread.php?t=4536143&page=108
  2. "You Can Cancel Your Orange Contract"
    1. (relates to the March 2013 increase
    2. http://forums.moneysavingexpert.com/showthread.php?t=4517039&highlight=orange+price+rise+2013&page=13
In the T-Mobile Forum we were successful in achieving a penalty free cancellation (back dated to April - and in some case with compensation ranging from £50 to £200) for 94% of the forum members who contacted T-Mobile by 9th May.

On the Orange thread whilst we are yet to actually achieve a contract cancellation - I have had a CISAS ruling (CISAS being the independent adjudicator) that the Orange price rise clause is UNENFORCEABLE and Orange have had to credit my account to ensure that I pay the originally agreed contact price for the full 24 months of the contract (I also received £50 compensation for Oranges misleading behaviour!).

The point of this thread is that I strongly believe that EVERYONE on any mobile phone contract that is 24 months or less in duration can obtain a refund of all sums taken over and above your originally agreed contract price - and I want to show you how to that.
«134567156

Replies

  • edited 15 November 2013 at 10:16PM
    RandomCurveRandomCurve Forumite
    1.6K Posts
    edited 15 November 2013 at 10:16PM
    Throughout the course of the last 8 months (I first joined the forum in April 2013) I have taken an avid interest in the consumer law that is there to protect you and me from these mid term price rises - Unfair terms in Consumer Contracts Regulations 1999 (UTCCRs) http://www.oft.gov.uk/business-advice/unfairterms/guidance/OFT311/Groups/



    I have also been in regular contact with Ofcom to persuade them to:
    1. Review the T-Mobile May 2013 price increase (and May 2012) and declare it unenforceable
      1. T-Mobile have now agreed to cancel the T-Mobile price rise for those customers on V59 of the contract - post #2149 http://forums.moneysavingexpert.com/showthread.php?t=4536143&page=108
      Please see update in post #17
    2. And to seek a judicial review of all past price rises as I believe you should all be entitled to a refund
      1. Which Ofcom have so far refused to do
    I have now started proceedings to refer Ofcom to the Parliamentary Ombudsman for failing to fulfil its statutory consumer protection remit.
  • edited 12 November 2013 at 11:25PM
    RandomCurveRandomCurve Forumite
    1.6K Posts
    edited 12 November 2013 at 11:25PM
    I should say right up front that I have no legal training, and any action you take from my posts is at your own risk. However that risk should be ZERO as the cost of following the advice is ZERO and the worst that can happen is that you do not obtain the refund.

    The steps you need to take are as follows (I am assuming that your Mobile phone provider will dismiss your claims at first).


    Step 1
    • Email your provider requesting a refund all of sums taken over and above the originally agreed contract price (I will post a "standard" email later this week)
    • Your provider will probably respond with a polite "No" and quote some legal jargon regarding GC 9.6 (Don't worry - you can ignore this)
    Step 2
    • Email your provider stating you still believe you are entitled to a refund and request that they send you an adjudication reference number (Again I will provide a standard Email for you to use)
    • At this point your provider will either:
      • give in (it costs them several hundreds of pounds (seems to be a trade secret but £300-£500 is the guessed figure)) to defend an adjudicator case - it costs you ZERO (win or lose!!!!).
      • If they do not give in then see step 3
    Step 3
    • I will post a statement for you to email to the adjudicator
    • The mobile company will submit a response to the adjudicator
    • you can then respond to that (again I will provide a standard email)
    • The adjudicator makes their decision - you win or you lose.
    If you lose than you have lost a little of your time sending some emails, but you have also learned a little about consumer law - and will see for yourself how weak and ineffectual Ofcom is.

    If you win you will be a few quid better off than you were before (better the money is in your pocket than the Mobile companies fat cat directors bonus)!

    And if you think that it is not worth fighting for relatively small sums of money then remember that the 2013 price increase for EE alone are worth an estimated £52,000,000 (yes £52 MILLION). So if you don't need/want the money then when you win donate it to a local children's hospice or some other worthy cause they need it more than phone companies!
  • Surely the point of those two threads you participated in was that Orange and T-Mobile were not able to show that they had followed their own terms and conditions. Therefore customers were able to argue successfully (in many cases) to the Ombudsman that they should be refunded/released from contract.

    I'm not sure how you can generalise from that to all contracts 24 months or less (where does the 24 months come from ?)

    In a general case you would need to prove that either the terms and conditions have been broken or that they are unfair (and therefore unenforceable). Simply repeating that you don't believe they are will not work. You'll have to give a specific documented reason (this is why many of the T-Mobile cases were succesfull)
  • Techhead - you are right in what you say, hence I am not offering a chance to have the contract terminated, but merely the amounts taken over and above the original contract price refunded.

    You are also correct that the way to this is to proved evidence that the contract terms are UNFAIR and therefore UNENFORCABLE, and that is exactly what I will show.
  • edited 15 November 2013 at 12:06AM
    RandomCurveRandomCurve Forumite
    1.6K Posts
    edited 15 November 2013 at 12:06AM
    I’ll post the first template letter up some time tomorrow, but first I wanted to give an overview of the arguments that need to be used to have the price rises refunded.

    There are two separate arguments, the first one is the one that I used to successfully have the Orange price rise declared unfair and unenforceable (and can be used for any mobile provider).

    The second argument has not (to my knowledge) been tested in a court of law or an adjudication process, but if the words of the UnfairTerms in Consumer Contracts 1999 ( UTCCRs) mean what they say then any contract of 24 months duration or less should not have a price rise variation clause that can be enforced in it.


    The first argument is that the price variation clause contained within the small print of your contract was not Clearly and Adequately drawn to your attention at the point of sale (if it was you can’t use this argument, but can still use argument 2). This argument is best supported with some documentary evidence, but can be made without evidence.


    The second argument is that a provider is not able to do any of the following:

    1. Have a discretionary price rise clause

    2. Use the price rise cause other than for the purposes stated in the contract, and

    3. Cannot transfer risks to the consumer that the provider is better able to predict and control


    Another principle of the UTCCRs is that the burden of proof sits with the provider NOT with you, and finally there is an over riding requirement for the provider to act in Good faith.
  • edited 15 November 2013 at 11:55AM
    RandomCurveRandomCurve Forumite
    1.6K Posts
    edited 15 November 2013 at 11:55AM
    I have checked the price variation clauses in the following contracts:
    • T-Mobile
    • Orange
    • Vodafone
    • Virgin, and
    • O2
    And all of the clauses are discretionary and therefore unenforceable.

    Below is the O2 clause (the others are all very similar in that they purport to give a right to vary charges, but cap that right at RPI).

    5.2 We may increase or decrease our Charges from time to time. If we increase our Charges (apart from for Additional Services), we’ll let you know at least 30 days before the Charges are due to go up and you’ll have the rights explained in paragraphs 5.3 and 5.4. We won’t increase your Monthly Subscription Charges more than once in any 12 month period.

    5.3 You can end this Agreement without having to pay the Monthly Subscription Charges up to the end of any Minimum Period you have left, if: (a) we notify you of an increase to your Monthly Subscription Charges by more than the published Retail Price Index (RPI) annual inflation rate at the date we announce the applicable price increase; or (b) we increase any of our Charges (apart from for AdditionalServices) in a way that such increase would have increased your total bill for the mmediately previous month by more than 10% (if the increase(s) had applied for the whole of that month).

    The clause at 5.2 states "We may increase or decrease our Charges from time to time." It does not say that they can do this only under certain circumstances - it is just a change they can implement purely at their discretion - this is unfair according to the UTCCRs!

    Don't be fooled by clause 5.3 "(a) we notify you of an increase to your Monthly Subscription Charges by more than the published Retail Price Index (RPI) annual inflation rate at the date we announce the applicable price increase" As all this is doing is placing a limit on the discretion they can use, it is NOT saying that they can only increase cost if their own cost increase this is very important.
  • I'm not sure "discretionary" means what you think it means. I appreciate what you are trying to do, but not the way you are doing it.
  • SilkSilk Forumite
    4.8K Posts
    Part of the Furniture
    Whats a "disretionary clause" I've never heard of such a clause ???
    It's not just about the money
  • Techhead wrote: »
    I'm not sure "discretionary" means what you think it means. I appreciate what you are trying to do, but not the way you are doing it.

    I was trying to avoid getting into the legal complexities as it is not necessary to complicate things. However you have asked a valid question - I am interpreting “discretionary” to mean what it means in the dictionary

    1. Left to or regulated by one's own discretion or judgment.
    2. Available for use as needed or desired: adiscretionary fund.
    (http://www.thefreedictionary.com/discretionary)

    The point is that the contract does not state under what circumstances charges can be changed - merely that they can! The fact that most providers have capped their powers at RPI does no mean that the price increase is linked to their costs.



    UTCCRs:

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

    (j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract.


    OFT guidance on the above section of theUTCCRs

    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 ismeant to be used in that way. A variation clause can upset the legal balance ofthe contract even though it was intended solely to facilitate minoradjustments, if its wording means it could be used to impose more substantialchanges. This applies to terms giving the supplier the right to makecorrections to contracts at its discretion and without liability.

    10.3Such a term is more likely to be found fair if:

    (a) it is narrowed in effect,so that it cannot be used to change the balance of advantage under the contract– for example, allowing variations to reflect changes in the law, to meet regulatory requirements or to reflect new industry guidance and codes of practice which are likely to raise standards of consumer protection

    (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.



    Further OFT guidance states:

    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 toterms allowing the supplier to charge a price on delivery of goods that is notwhat 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.
  • I am going to post the template letter now and then I will follow that up with some explanations.

    Some points to note:
    1. You can use this even if your contract has ended
    2. It is not subject to a 30 day limitation (I think it is a 6 year limitation)
    3. You need to amend the text in red
    4. Reverences to the UTCCRs are just that in the letter I have not complicated it by copying in the relevant laws - the phone company will know what they are
    5. If you want to check the reference to the law then follow the link in my post #2.
    6. You do not need to understand all that is there - we are consumers not legal experts! Following my template emails should be sufficient.
    Good luck.
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