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Telecoms - Case studies

Which? Legal member Andrew Sheridan bought an upgraded telephone and broadband package from BT in January 2019. When Andrew called BT to sign up to the new contract, he told the representative there was a possibility he’d need to emigrate during the term of the agreement. The sales representative told him there could be some ‘exit charges’, which Andrew understood to be up to a month of fees, but that in the circumstances BT might consider waiving them.

When Andrew did later decide to relocate and he contacted BT again, he was told that he needed to pay £436.05, amounting to the remainder of the contract. This figure was far more than he had anticipated.

Our advice

We advised that Andrew may be able to argue that he was misled by the sales representative. Under the Consumer Protection from Unfair Trading Regulations 2008, a misleading action is defined as giving false information which is likely to influence the average consumer’s transactional decisions. Andrew disputed the charges with BT.

BT told us its sales representative had accurately told Mr Sheridan fees would apply if he moved, but that it would look into waiving the charges in a gesture of goodwill. After Andrew made a complaint, the charges were indeed waived.

The law

If you’re misled by a company and suffer a financial loss as a result, you could be able to claim either a price discount or damages. This allows you to effectively set off the loss you have suffered as a direct result of the misleading action.

It’s important to gather evidence to prove your assertion. With most major companies, you can request a transcript of any call recordings. But make sure you’re clear on the small print of your contract. BT told us that its standard policy is to charge early disconnection fees during the minimum contract term. Customers moving abroad would not normally qualify for an exemption to these fees, unless they are in the Armed Forces.

Six months after taking out a phone, broadband and TV package with TalkTalk, Jeanette Hancock started having issues with the wi-fi signal dropping out.

When a reboot of the router failed to fix the problem, Ms Hancock arranged an engineer visit. But the engineer never arrived, and when she contacted TalkTalk it told her that no engineer was booked. She was promised a call back from a manager, which didn’t happen. She then emailed TalkTalk’s chief executive Tristia Harrison, and had a reply saying the support team would contact her within the next 48 hours. When she heard nothing, she contacted Which? Legal for advice.

Our advice

After getting advice from the legal team, Ms Hancock emailed Ms Harrison again and made her aware of Which?’s involvement. Within a couple of hours she received a call back from the support team. She explained the problems and the TalkTalk adviser booked an engineer, who resolved the issue. Ms Hancock had a follow-up call from TalkTalk that evening offering an apology, and promising to replace the router if she had any further problems.

The law

Ms Hancock’s contract covered both goods and services. Such contracts are governed by the Consumer Rights Act 2015 (if entered into on or after 1 October 2015), or the Supply of Goods and Services Act 1982 (if entered into before then). These make it an implied term of the contract that the service provider will provide goods that are of satisfactory quality and fit for purpose, and that they will exercise ‘reasonable care and skill’ in the performance of their services. If a telecoms company such as TalkTalk provides faulty equipment, or a broadband service without an adequate wi-fi signal, one can argue that it’s in breach of contract.

By expressly stating that time is of the essence, and giving a reasonable time limit in which you expect the matter to be resolved, you are fixing a time for contractual performance. If the supplier fails to perform by this date, you can treat the contract as at an end.

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.