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  • FIRST POST
    • Barnezy
    • By Barnezy 8th Nov 18, 5:18 PM
    • 7Posts
    • 8Thanks
    Barnezy
    Nursery Extortion
    • #1
    • 8th Nov 18, 5:18 PM
    Nursery Extortion 8th Nov 18 at 5:18 PM
    We live in SW London where there is an acute lack of childcare options and as such some nurseries are taking advantage of this. Our son has been attending his nursery since 2017 in in that time there have been two annual fee increases of 4% each time. I looked in to it and the nursery has increased its fees by 18% over the past 5 year period. It quotes improvements and salary increases as the cause, but I’m yet to see what these improvements are and I doubt they are giving their staff a c6-8% salary increase each year. This just feels like a blatant exploitation of the position the nursery has, especially when your child is already attending.

    This aside, my question is whether the terms in the nursery’s contract are valid as they seem disproportionately balanced in the favour of the nursery. The notification of the fee increase came on 1st November as per their T&C’s, however this is a full month after the last day you can give notice to remove your child from the nursery, without being subjected to the increased fees. According to their terms the earliest you could leave is the 30th April meaning you are liable for whatever they choose the fees to be, for at least 3 full months. This cannot be right.

    Secondly the notification period seems extremely exaggerated. Why at a nursery that has an extensive waiting list do they only allow children to leave at 3 points in the year without incurring a fee. And on top of this a minimum of 3 months’ notice needs to be given as well. This also seems to be very heavily stacked in the nursery’s favour and unfair to their consumers.

    As a result of the consecutive increases and it’s unpredictability, we are looking to take our child out, in favour for another nursery we have found. When and how we do this will be down to whether the terms in this contract are challengeable given the current context. I’m happy to employ a lawyer to conduct proceedings, but before I do that I wanted to get a view from others, what they believe the approach should be.

    I've tried to attach a photo of the terms but the site won't allow me as I'm new. If I can PM someone the link to the photo, can they post it for me?
    Last edited by Barnezy; 08-11-2018 at 5:20 PM.
Page 2
    • unholyangel
    • By unholyangel 9th Nov 18, 3:23 PM
    • 12,984 Posts
    • 10,288 Thanks
    unholyangel
    Well yes and no, yes if the rise is well above inflation and deemed unfair. No if it's a reasonable rise inline with inflation.


    You will find mobile contracts etc keep their price rises on line with inflation to avoid allowing people to leave
    , pretty much similar here, only a court could decide if your rise is unfair or not because they are allowed to raise them.


    If you allow the contract to roll into January the yes you are accepting the contact, you can't just cherry pick when you want to leave.
    Originally posted by bris
    They haven't been allowed to do that for nearly 5 years due to ofcom. Ofcom treat any increase in monthly subscription fee as a material detriment, which means the provider needs to give at least 30 days notice and the customer must be able to leave the contract without penalty/without being affected by those changes. The only exceptions to that is where its been set out in legislation by government and it is compulsory (for example when VAT increased from 17.5% to 20%).

    Previous to that, providers used to argue they were allowed to increase in line with inflation, but ofcom disagreed and so issued guidance thats binding on providers.
    Money doesn't solve poverty.....it creates it.
    • bris
    • By bris 9th Nov 18, 3:28 PM
    • 8,027 Posts
    • 7,029 Thanks
    bris
    https://www.moneysavingexpert.com/news/2018/02/-pay-monthly-mobile-customers-with-three-face-mid-contract-price-rises/
    • unholyangel
    • By unholyangel 9th Nov 18, 4:18 PM
    • 12,984 Posts
    • 10,288 Thanks
    unholyangel
    Did you bother to check ofcom or their guidance?

    Theres this article from them, or this one and then of course you have the guidance itself.


    Now look at the examples the guidance gives:
    • Example 1: discretionary price increases
    The subscriber agrees and enters into a 24-month contract for services on terms
    that the core subscription price will be 10 per month. The contract also contains a
    term to the effect that the CP may increase the agreed core subscription price8 by
    up to a certain amount, percentage or index-linked level (such as RPI)
    .9
    Ofcom is
    likely to treat any exercise of the discretion to increase this agreed price during the
    fixed minimum term of the contract as a modification meeting GC9.6’s material
    detriment requirement.

    Ofcom’s concern is with the application of price and price variation terms which give
    the CP discretion as to, for example, the possibility, amount and/or timing of a price

    4
    increase. We are likely to take a similar approach to that above to the application of
    contract terms that reserve such discretion and/or are to the same or similar effects
    as those in example 1.

    • Example 2: agreed prices
    The subscriber agrees and enters into a 24-month contract on terms that the core
    subscription price will be X per month for the first 12-months (or some other
    period) and X + Y (or X + Y%) for the second 12-months (or some other period).
    On the basis that the relevant price terms are sufficiently prominent and transparent
    that the subscriber can properly be said to have agreed on an informed basis, at the
    point of sale, to the relevant tiered price(s), Ofcom would not regard the application
    of the agreed price in the second period as a modification of the contract capable of
    meeting GC9.6's material detriment requirement.

    • Example 3: agreed prices
    The subscriber agrees and enters into a 24-month contract on terms that the
    agreed core subscription price will be X per month for the first 12-months (or some
    other period) and X + RPI10 for the second 12-months (or some other period). On
    the basis that the relevant price terms are sufficiently prominent and transparent
    that the subscriber can properly be said to have agreed on an informed basis, at the
    point of sale, to the relevant tiered price(s), Ofcom would not regard the application
    of the agreed price in the second period as a modification of the contract capable of
    meeting GC9.6's material detriment requirement.

    A1.15 As set out above, the position in examples 2 and 3 depends on the relevant price
    terms being sufficiently prominent and transparent that the subscriber can properly
    be said to have agreed on an informed basis, at the point of sale, to the relevant
    tiered price(s). Where that is so, the application of the agreed price(s) at the
    relevant time(s) would not be a modification of the amount he or she has agreed
    and is bound to pay. Most clearly, this proviso as to prominence and transparency
    could be met where CPs market offers, and enter into contract terms, in a way that
    sets out with equal prominence that the contract price is X in period 1 and Y in
    period 2 (or some other periods).
    Compare examples 1 and 3.

    In one you have a term allowing them to increase the price, but no timing agreed. Thus ofcom will treat it as a material detriment which attracts cancellation rights. In three, you have the term allowing the increase plus the timing agreed and thus, is the contract price that was agreed at the time of entering the contract rather than a contractual variation giving rise to material detriment.

    ETA: That is to say that ofcom require them to specify the level of increase (%, indexed, or specific amount) plus the timing, plus make that term prominent and transparent enough that the consumer was able to make an informed choice at the point the contract was formed (ie not buried in small print they received a week later).
    Last edited by unholyangel; 09-11-2018 at 4:27 PM.
    Money doesn't solve poverty.....it creates it.
    • Undervalued
    • By Undervalued 9th Nov 18, 4:40 PM
    • 3,576 Posts
    • 3,261 Thanks
    Undervalued
    You can't afford to live where you are with children.


    We raised our three with just me on a maximum salary of 18k. My wife stayed at home and looked after them.


    Paying four grand a month, a MONTH is just stupid.


    Have you looked into hiring an au-pair or nanny? It has to be cheaper than 4 grand a month.
    Originally posted by General Applause
    Good for you!

    However if your wife could have commanded a six figure salary she may well have opted to work full time and pay for this sort of level of childcare. It is a free country and it provides employment for others.

    With full employment costs, overheads and other expenses it may well not have been cheaper to employ a nanny. There are other factors too, what about if the nanny was sick? Using a reputable nursery avoids those problems.

    There is a big world out there with wildly differing incomes and expectations!
    • Undervalued
    • By Undervalued 10th Nov 18, 11:58 AM
    • 3,576 Posts
    • 3,261 Thanks
    Undervalued
    I don't think it is a free country to be honest...


    I think that the well-paid jobs are generally around London and that businesses take advantage of that.


    In contrast, a family from the North could probably support one or more children on 18k a year and still pay for childcare.


    And it infuriates me for three reasons:


    1. It does create either a Rich-Poor or North-South divide with people in this country (someone who manages on 18k a year and someone who manages on megabucks a year can't get along).


    2. It is just a colossal waste of money! Why can't some of that money paid in childcare fees go towards helping homeless people on the streets etc? Or even the men, women and children dying abroad due to dodgy regimes? Instead it goes to either greedy Nurseries and/or greedy landlords who want a bigger slice of the pie (or whoever is squeezing their balls!)


    3. OP/partner is potentially spending SO MUCH less time with their children than the General Applause user you quoted! Life is short to be fair, never know when you're going to clock off and it would really suck if you clocked off midway through a 60 hour week whilst your children were in their 3k a month nursey wouldn't it? Or do Londoners not really care about that sort of thing?
    Originally posted by Les79
    OK, some quite fundamental issues here and there are valid points of view on both sides.

    Regarding point 2...

    Is the nursery being greedy? Or are the fees simply a reflection on the total costs of providing a (hopefully) top notch service with good staff in an expensive area? Many people who have never experienced running a professional business have little idea of what it costs and why the fees, which naturally seem expensive to the client, have to be as high as they are.
    • robatwork
    • By robatwork 11th Nov 18, 11:06 AM
    • 4,686 Posts
    • 5,256 Thanks
    robatwork
    I guess the elephant in the (nursery) room is - can you afford for you or your partner to have a career break to look after your children?

    In the long run that's better for you & your children, and you won't feel extorted from either.

    Not judging, just asking.
    • sheramber
    • By sheramber 11th Nov 18, 2:44 PM
    • 5,435 Posts
    • 4,076 Thanks
    sheramber
    Weve found another nursery just around the conner from this one that is just as nice.

    In an area that has a shortage of child care facilities you have found one that not only is much cheaper but has available space.

    I would be questioning why it has available space.

    Surely a good nursery in an area with a shortage of places would have a waiting list.
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