It is not unusual to be told ‘sorry you are still in contract’ when raising a query with your business telecoms supplier. Are you really? Maybe, but may be not!
If you are not sure whether you are in contract, or you’d like to protect yourself before committing to any new or additional deal, here are some tips.
Remember that the onus is on the supplier to prove contract end dates. Their system may have a date but it could be incorrect as a result of data processing errors. It is also possible that the supplier is attempting to mislead you. Can they provide reasonable proof such as a call recording or a copy of the original signed document or e-contract? When suppliers avoid providing such proof it’s hard not to speculate that they’re hiding something. In a situation where no proof was provided a letter to the chairman of a major supplier resulted in confirmation of release.
Ofcom rules protect consumers and businesses with ten employees or fewer. This protection includes a ban on automatic rollover of contracts – customers are given the ability to cancel contracts because of prices rises and/or failures to offer promised broadband speeds.
Not surprisingly some suppliers try to avoid these protections. We’ve seen contracts saying ‘tick this box to keep tariffs after contract end date’. You are not told that by ticking this box you are agreeing to an automatic renewal. But that’s exactly what you are doing – you are renewing for that same term again. Effectively they are getting you to waive your rights by ticking the box.
How are price rises notified?
Price rises may be advised by publishing them on the supplier website or the small print on invoices. Not the most direct approach! Ofcom has ruled that you can opt out of a contract if the price rises – as long as you give notice within 30 days of being told. Therefore, if you miss the notification you miss the chance to cancel. This same approach can be used for ‘notification’ of changes to other Terms & Conditions which can also mean you miss out on opportunities to cancel your contract.
Tricks you must watch out for
Adding new services that have their own contract so end dates never align, meaning cancellation is almost impossible as you’ll never be out of contract on all your services at the same time. Mobiles are a favourite for this tactic
Having different terms for each element of the contract. For example, having calls for two years and in small print the lines are for five years
Automatically restarting your contract if you change or add something
False inducements to purchase – for example ‘we promise to save you money’ but when you get your invoices there is no saving.
Long notice periods. Notice can vary, most usually in the range of thirty days to six months. But be warned. We have seen a three year notice period.
What penalties will you pay for early cancellation of the contract? There could be a reasonable stipulation that if you got free installation in return for a three-year contract you’ll be asked pay for the installation if you can cancel, say after twelve months. Again, small businesses are protected by Ofcom rules on the calculation of penalties but many suppliers try to ignore these and rely on their customers’ ignorance. Make sure you understand the rules.
Protect your business
Check if the supplier is signed up to the telecoms ombudsman as that offers free binding arbitration to consumers and small businesses if there is a dispute. If you have major concern you’ll want to consult a lawyer which could save money in the long run.
It’s a good idea to email spelling out your understanding of contract. Ask the supplier to confirm, in writing, that should there a conflict between their T&Cs and the email – the email takes precedence. Tell them you are only accepting contract on this basis.
In the email you could include:
Contract duration and notice period
That prices are fixed for duration – any changes gives you freedom to cancel without penalty whenever it is spotted
Only the charges specified in the contract may be levied . This will prevent you being hit by hidden costs such as call set up fees and also any changes in T&Cs
Any claims made (e.g. you will save money) . State clearly that they are a condition of the contract and that if the supplier fails to meet these the contract is null and void
State that the contract will not rollover at the end of the term without your explicit prior consent
How often do businesses compare their bills to the prices in the contract? We find large differences – frequently. The longer the contract the more closely to should read the small print and keep a check on invoices etc.
Has a supplier agreed to pay any penalties you may incur by switching to them? And then failed to follow through? If you are offered this incentive, make sure you get it in writing. Ensure there is no cap to the penalties that will be reimbursed and that they will be paid within 14 days of you being charged. Let them know that failure to comply will make your contract with them null and void.
As with all contracts there is no escape from the work of ploughing through the detail. You must be fully aware of what your rights are, and the specific details of the contract you are signing – including the long term commitments. Always scrutinise your bills and be ready to raise issues your supplier if you spot any unexpected changes, inconsistencies, or failures on their part.
Dave Millett of Equinox