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Telecoms - Case studies

A Which? member who thought she’d found a cheap mobile phone contract for her daughter had a nasty surprise when the first bill arrived for more than twice what she was expecting. In response, Sylvia Kovacsits called T-Mobile to cancel the contract.

T-Mobile offered her a new contract that was £5 a month cheaper than her current contract. It came with a new smartphone, 100 minutes talk time and unlimited texts. However, when the first monthly bill arrived, it was for £18 instead of the £10.50 she was expecting.

Sylvia called T-Mobile and was told the extra charge was because the smartphone had converted text messages of more than 320 characters into picture messaging.

Which? Legal advice

Unhappy with the contract, Sylvia contacted Which? Legal.

We advised her to write to T-Mobile pointing out that she couldn’t be bound by the terms of a contract that were not brought to her attention at the time the contract was agreed.

T-Mobile replied offering a refund of the first month’s charges as a goodwill gesture, but wouldn’t offer a further refund. Following further advice from Which? Legal, Sylvia wrote again stating that, as T-Mobile had misrepresented the contract, she wanted to cancel the contract under the Misrepresentation Act 1967.

Outcome

T-Mobile agreed to release her from the contract if she returned the phone.

Legal points

When you enter into a contract, only terms brought to your attention when the contract was made, can be binding. If you enter into contracts based on information you were given which turns out not to be true, you may be able to cancel the contract on the basis of misrepresentation under the Misrepresentation Act 1967 in England and Wales, and under common law in Scotland.

If you enter into phone contract by telephone, the provider must comply with the Distance Selling Regulations by providing you with certain information, specifically the right to cancel the contract within seven days. However, if you don’t receive notice of your cancellation rights, that right is extended to three months and seven days beginning the day after you received the phone.

A 77-year-old Which? Legal member was threatened with court action to recover a debt of just £3.76 from cancelling a phone contract.

Arno Rabinowitz was shocked to receive a letter from debt collectors for a debt he knew nothing about. He turned to Which? Legal to help stop court proceedings and to wipe out any suggestion that he owed money.

Cancelling a mobile phone contract

As a Onetel customer, Arno paid a monthly line rental on a mobile phone and for 1877 prefixes for cheaper landline calls. He decided to change providers and called to cancel his contract. He agreed with the company that the contract would end at the end of October 2010. He paid what he was told he owed (£7.83) and was given no advice about when to cancel his direct debit instruction.

Debt collectors

Three months later, Arno received a letter from debt collection agency Commercial Credit Services (CCS), acting on behalf of Onetel. Arno was shocked to receive the letter, which he described as intimidating and aggressive, as he had no knowledge of any debt owing to Onetel.

The letter, headed ‘Notification of Legal Proceedings’ stated he owed a debt, now raised to £41.76 which would lead to court action and a debt of £122.03, unless he contacted CCS to settle.

Arno felt vulnerable and threatened, so took immediate action to telephone and pay CCS the £41.76. He wished to avoid the threat of court action and eliminate any possibility of an adverse credit reference, but told CCS that he was paying under protest.

Which? Legal advice

Arno then contacted Which? Legal. Our lawyers gave Arno advice and wording for the content of a letter to TalkTalk, which is part of the same group as Onetel. TalkTalk told Arno that he had been contacted by email, but Arno said he hadn’t received any emails or reminders that £3.76 was due.

Outcome

TalkTalk has since apologised to Arno and promised to refund his payment to CCS less the small amount owing. It promised to ensure his credit file wasn’t affected.

Legal points

You can expect to receive notice of a debt from a business, and a reasonable chance to settle it, before hearing from a debt collection firm.

Debt collection guidance issued by the Office of Fair Trading says that charges for debt collection should not be levied unfairly. Examples of unfair practices include applying charges that are disproportionate to the main debt. 

Elizabeth faced major upheaval when her property was flooded after heavy rain in November 2010. She had to move to temporary accommodation for seven months, while the entire ground floor of the house was rewired and replastered.

As part of the move, she contacted BT to ask for her broadband and phone to be transferred to her temporary accommodation.

BT told Elizabeth her phone and broadband would be installed on 29 December 2010. It later cancelled the appointment. A second order was placed and Elizabeth was assured installation would take place on 12 January 2011. She then discovered that this order had been changed to ‘pending’. BT then told her to cancel this order and place a new one.

Frustrated with the lack of progress and poor customer service – on one occasion she was left waiting on hold for more than an hour in order to speak to someone – Elizabeth wrote to BT to cancel her contract. 

She received no response, despite sending BT a further letter. She was then received a letter from a debt collection agency stating that her credit rating could be affected if payment was not made for her present account.

Which? Legal advice

Elizabeth sought advice from Which? Legal. We told her that, under the Supply of Goods and Services Act 1982, BT has to carry out all aspects of its service within a reasonable period of time, using reasonable care and skill.

As it had done neither, she could terminate her current contract and cancel any ‘pending orders’ without financial penalty. We told her she should write to BT again, setting out the above, and stating that if her credit rating was affected, she should also write to the Information Commissioner’s office on the basis that BT had no right to put anything detrimental on her credit file. 

Outcome

Elizabeth sent the complaint by email and on the same day received a call from BT stating that the debt would be cancelled and she wouldn’t receive further communication from the debt collection agency. BT also agreed to pay Elizabeth £15.

Legal points

If you’ve experienced problems with your broadband service that aren’t rectified to your satisfaction, you may be able to terminate the contract without financial penalty. Many providers claim that you must pay a cancellation charge but this is not the case.