Mobile Contracts - How do I get out?

[judelsg]

My husband and I have a mobile phone contract with Orange. The contract on my phone was up for renewal in September and I renewed and gained my new phone. My husbands( on the same contract ) is due for renewal in March this year.

 

October I lost my job. 2 weeks later my husband lost his Job too. I rang Orange and they explained I owed 75 for end of September, but the DD was not due to go out until Mid Oct ( i canceled this DD) and a further 75 for October. Therefore they agreed I could pay them 50 a month to pay this off and have no service on our telephones. I explained I could not afford the 50 a month at present and could they just freeze the contract until we are both back in work. They explained the 150 debt would remain and a standard charge of 25 a month applied for every month even though the phones have now been cut off.

 

Is there anything I can do?

 

Do not even get me started on my Electriity bill of 500 I just received and 430 for my gas with British Gas. They are increasing my Direct Debits to 380 a month ! I liv in a 3 bed house with hubby and two kids. 380 a month seems triple what I used to pay. What is going on?

[buzby]

Well, in answer to the question, you get out by arranging termination and the final bill is calculated based on the number of months remaining. This is then paid and the matter is closed. (You get to keep the handsets).

 

If what you are saying is you want to minimise the amount you have to pay for the contract, since the phones have been disconnected, the time for tariff juggling (assuming this was possible) has ended, and they'll simply show on your credit files that the money is owed and the contract is in default.

 

Unless you can identify any error in the amounts charged or in the closure of the contract for non payment, there isn't much that can be done. Mobile contracts are going to be a BIG headache for for in the current financial climate, as the contract will remain if force even if circumstances change - this is why folk should NOT renew or upgrade their service unless they are sure their financial circumstances will not change.

[mallyonline]

Firstly, I do not wish to promote any false hope on this subject but it is a subject that I am studying at this moment.

You say that despite having an agreement with the company to pay an amount each month they are still applying the monthly charge for the agreed tariff from the original agreement irrespective of the position you find you and your partner in.

My study has found that although this contract is not regulated by the Consumer Credit Act 1974 in so much as the contract is with a service provider and not a loan or credit card company it will still be regulated by the Unfair Terms in Consumer Contract Regulations 1999.

You will find in your contract with Orange that there is a section with regards to making payments to them and the consequences if you fail to make your agreed payment/s.

It is in that section of the agreement you may find that the company shoot themselves in the foot with relation to an Imbalance in the Consumer Contract Regulations for which you could argue that due to the Requirement of Good Faith the company has disadvantaged you by continuing to charge the monthly fees on a contract to which they know you are unable to use!

The Requirement of Good Faith

The requirement of good faith embodies a general ‘principle of fair and open dealing’. It does not simply mean that a term should not be used in a deceitful way. Suppliers are expected to respect consumers’ legitimate interests in drafting contracts, as well as negotiating and carrying them out.

"cum alterius detrimento"

Reversal by restitution, the company are taking your money and profiting from your hardship. They are aware of the hardship and should respect your position. The company is unduly enriching themselves with disrespect to your current situation.

Therefore, you could argue under in the Unfair Terms in Consumer Contracts Regulations 1999 that due to the Requirement of Good Faith (Unfair Terms in Consumer Contracts Regulations 1999) the company seeks to Unduly Enrich themselves by continuing to charge you for a service that they are already aware they are not providing you.

I would hope that others can get involved in this thread.

[buzby]

However in the real world - anyone making a commitment and signs an agreement to that effect, is duty bound to keep to those agreed terms under pain of financial disclosure and cancellation, along with the contracted amount remaining due.

 

You would have to successfully argue that the contract, as signed, was inherently unfair (which it wouldn't be) and then explain why you didn't keep to the agreed terms, and why the challenge wasn't simply vexatious!

[installspark]

Also the network is claiming back the amount of subsidy it provided with the "free" handset, depending on the make and model this could be in the region of £300.

 

Have the accounts been fully disconnected or just had a bothway bar placed on them?

 

If they have been fully disconnected and you have received the final bills (including any termination charges), then your network should agree to a repayment plan. If it is just a bothway bar, then the accounts will still continue to be billed until termination.

[mallyonline]

In the contract that I had with 3 the following term was applied to the contract:

6.17 If you fail to pay your account on time, you will be breaking your agreement and we may Suspend or Disconnect you. In this case, you will have to pay any outstanding Charges.

 

My argument is that whilst it only fair to suspend the service if a payment is overdue it can also be argued that it is potentially unfair for the service provider not to refund any payment due under the agreement when the account is finally brought up to date!

1, 3 offer you a tariff for a monthly price. 2, 3 suspend your account usage due to none payment and you are therefore not able to use the agreed tariff. 3, you bring the account up to date but have lost out on the ability to use the tariff and 3 refuse to refund the difference.

Would it not therefore be in The Requirement of Good Faith for 3 to reimburse you for the time spent unable to use the service due to there technical restriction of the service? If so then you could argue that under the Unfair Terms in Consumer Contracts Regulations 1999 due to the Requirement of Good Faith that the term 6.17 is in part’ unfair? Save for the ability to restrict a user due to none payment. The following text

“In this case, you will have to pay any outstanding Charges” this contradicts the requirement of good faith. Should it have read something like

“In this case, you will have to pay any outstanding Charges. However once the account is brought back up to date we will reimburse your usage where we have technically restricted your service”

Now that would be fair’ would it not? any thoughts?

[jonni2bad]

judelsg - it rather sounds as though you actually need to consider the prioritising of your current commitments, rather than just this individual debt.

 

If you are struggling to keep your head above water, I would advise you to contact a debt advice agency, such as the CCCS (click here for a link) and talk about your problems. They can help you to work out how to cope with each debt/overdue amount and will hopefully also put your mind at rest with any other worries you might have.

 

If this is not the case and you only have some short-term cash worries, then you might need to just make whatever payments you can to the service provider here and, should they sell on the remaining debt, agree to pay a realistic amount you can afford with them at that point.

 

Be aware that the service provider might issue you with a Default Notice - outlining their request for "immediate" payment in full. These usually give the customer a short period - perhaps up to 28 days, in which to satisfy the debt, otherwise your credit files will be marked as defaulted on this account.

 

If you don't already have any adverse credit, this can be a very bad thing for your credit rating for 6 years.

 

Cross these bridges when and if we come to them. First step - identify the problems you have and be realistic as to whether you need more help, maybe from an agency as shown above.

[buzby]

Also the network is claiming back the amount of subsidy it provided with the "free" handset, depending on the make and model this could be in the region of £300..

 

No, they cannot do this. There certainly will be a clawback but this will be restricted to the dealer/retail outlet which will lose its commission on the sale or upgrade. The subsidy is built into the monthly charge, so their only option is to reclaim the subsidy and allow early termination without further penalty (unlikely), or that the minimum term is is retained, as the subsidy would be fully repaid at the end of the minimum duration (most likely).

[buzby]

Incidentally, a US outfit has recently opened a UK website that matches up people who want out of their contract, to those who want a minimal commitment, but the better pricing for calls and texts (that would be transferred to a new owner). This is often the only way you can legally break a contract, but whilst they don't guarantee a match - at least it is better than paying out money with no hope of a release before the termination date.

 

As the forum doesn't allow commercial links, search for Cellswapper UK

[Fiscalawareness]

Hi everyone

 

I am happy to try to take CARPHONE Wharehouse to court over the “In this case, you will have to pay any outstanding Charges” this contradicts the requirement of good faith.

 

i unfortunalty did not pay my bill for a mont i was blocked and ran the phone for 2 months incoming only, this was due to extreme financial hardship.

 

I found the £127 they wanted payed them and the bar was lifted, only to be disconnected and terminated without any bill outstanding 5 days later.

 

They say i have two choices. pay a £200 deposit which is extreme as i can afford the £40 a month or pay the account up to July with no service at all.

 

I cant see how i should pay for by then 8 months of a service they are not supplieing.

 

Question was the contract i signed for the phone or the line, if the contract is for both, then the line should still be atleast incoming as it is the service is segned up for.

 

I would really like to take them on if theres a chance i can win even small.

 

Another question is whats the cheapest way to get to small claims, it cost us at least £150 a pop at the moment

 

any thoughts

 

James

[installspark]

Question was the contract i signed for the phone or the line, if the contract is for both, then the line should still be atleast incoming as it is the service is segned up for.

 

The contract will be for the airtime agreement which allows you to access the network.

[installspark]

Incidentally, a US outfit has recently opened a UK website that matches up people who want out of their contract, to those who want a minimal commitment, but the better pricing for calls and texts (that would be transferred to a new owner). This is often the only way you can legally break a contract, but whilst they don't guarantee a match - at least it is better than paying out money with no hope of a release before the termination date.

 

Not all networks will allow you to do a transfer of ownership such as this. The company I work for certainly does not allow transfer of ownership on consumer post pay accounts.

 

No, they cannot do this...... The subsidy is built into the monthly charge, so their only option is to reclaim the subsidy and allow early termination without further penalty (unlikely), or that the minimum term is is retained, as the subsidy would be fully repaid at the end of the minimum duration (most likely).

 

 

That is what I meant; there is no such thing as a "free" handset on a monthly contract. In retentions you get to see how much the subsidies are on the handsets and how profitable a customer is to the company.

[Fiscalawareness]

The contract will be for the airtime agreement which allows you to access the network.

 

or not if they terminate the agreement and continue to charge, i have written to them asking them to reconsider the £200 deposit they want to continue the agreement or the remaining payments over the next 7 months without a service.

 

I have asked for a fair and reasonable deposit based on my phone usage and that im happy to have my account capped to ensure i dont overspend.

 

I have also put in SAR incase i cant negoitate with them,

 

i will let you know the outcome etc

 

james

[jonni2bad]

Fiscal - please ensure this thread is not hijacked into your own discussion.

 

If you have a problem that needs the help of other users, please start your own thread - thank you.

[Fiscalawareness]

Sure thing

[buzby]

Not all networks will allow you to do a transfer of ownership such as this. The company I work for certainly does not allow transfer of ownership on consumer post pay accounts.

 

80% of them do. For any network that specifically excludes this can be challenged as it is an unfair term (effectively ensuring the the customer cannot equitably discharge their liability).

[installspark]

80% of them do. For any network that specifically excludes this can be challenged as it is an unfair term (effectively ensuring the the customer cannot equitably discharge their liability).

 

That I certainly agree with

 

The company I work for (think better connected) do not allow a full transfer of ownership on a consumer post pay account, i.e change of name to a different 3rd party, but will allow change of banking details but the responsibility lies with the original account holder. The reason given for this is that each individual customer must be credit checked prior to taking a monthly contract.

[buzby]

I have to say their 'excuse' is lamentable. For the other companies that allow it, the applicant that takes over the remaining contract is still credit checked, as not to do so would be a major loophole. For your company to work this way is lunacy, and I do hope somebody challenges it.

 

I'm assuming we're talking about T-Mobile?

[installspark]

I'm assuming we're talking about T-Mobile?

 

Nope:p:p:p Think of a white elephant in Greenwich;)

[buzby]

Now, I've a blank contract from them circa 2006 that does allow the transfer (with their express agreement), so the change in tactic is really disappointing.

[installspark]

From the current T&C

 

6 Assignment

6.1 You cannot transfer the Service to anyone else unless we agree in writing.

6.2 We shall be entitled to assign or transfer our rights and obligations under this Agreement or any part of it on the same terms to any third party.

As it is highly unusual for them to agree a transfer of ownership on a consumer account, it could be argued that s6 automatically becomes an unfair contract term as they can transfer their rights but a consumer cannot

[buzby]

Hmm - this doesn't specifically exclude the customer's rights to arrange a transfer with their agreement. I appreciate you say this doesn;t happen, but the fact is finding someone who wants to take on a contract with an 'old' phone are not legion. This new website that brings together those who wish to take up a minimal contract from someone who wants out is a step in the right direction. The cellswap UK folk have not highlighted O2 as a no-no for transfers.

[installspark]

Hmm - this doesn't specifically exclude the customer's rights to arrange a transfer with their agreement.

 

For business accounts, which are on t'other billing system, a full transfer of ownership is not a problem and can be easily done in a phone call.

 

There was a period some 12 months ago where we could arrange transfer of ownership as a save tool, but this was removed after a couple of months.

 

The cellswap UK folk have not highlighted O2 as a no-no for transfers.

Nor is o2 listed on their network list, whereas the other 4 networks are. The ability to transfer ownership should, in my opinion, be written into all T&C. It is better for the customer and also better for the business.

[buzby]

Absolutely I hope somebody will make an issue of it.