Mobile Phone Companies & The CCA 1974 (Linked Transactions)

[Spursflyer]

The issues with disputes involving mobile phones, is that if you do have a dispute and it is referred to an Ombudsman scheme, then if your claim is upheld any award could at best be described as mediocre.

 

One of the key areas that needs to be explained, which may form beneficial to consumers are linked transactions which may fall under the Consumer Credit Act 1974, are thus referable to FOS, which could result in an award exceeding £5,000.

 

When consumers often take out a mobile phone contract, they often have to pay an additional fee to obtain certain handsets, in particular where the I-phone is involved. This additional fee could in many instances be paid by credit card, which in effect, relates back to the Consumer Credit Act 1974.

 

The handset is an essential part of the transaction as you cannot utilise an airtime agreement with O2 etc without one - you need the phone to make the calls !

 

The airtime contract may sit outside of the Consumer Credit Act 1974, however, the purchase of the handset could be deemed to be a linked transaction. In addition both the handset and the airtime contract are very often sold by the same company.

 

Question, if a dispute was to arise in respect of the phone contract and the consumer was;

a. in a position where there airtime agreement debt was sold to a debt collector.

b. involved in a dispute arose about the product being fit for purpose. ie no signal area, faulty phone etc

 

Then surely FOS would be able to provide an opportunity to adjudicate and award the consumer enhanced redress if any dispute was handled in an efficient manner ? At present we are seeing thousands of consumers accounts being handed to companies such as Lowell's, whom would appear to pursue consumers whom often have genuine disputes, without the risk of such companies being penalised sufficiently for the manner in which they handle complaints.

 

At present there is not enough facilities for consumers to seek redress where a. airtime contracts are concerned and b. where consumers are unfairly harassed by DCA's when they have been incorrectly targeted or the debt does not exist.

[2Grumpy]

The "Free" mobile phone isn't really free but is paid for out of the monthly charges (and the additional fee)

 

I think it is described as "free" to avoid the contract being partly a HP agreement that would be covered by the CCA

 

Perhaps it is possible to argue that since a part of the monthly charges covers a repayment amount for the phone, the agreement is implicitly covered by the CCA (or the mobile company is an unlicensed credit provider

 

There were lots of artificial devices to get around legislation (eg selling carrots for a fortune but giving a free car to get around sunday trading legislation). This could be another (and widespread) scheme, in this case to get around the CCA and/or requirement to be a licensed credit provider