The problem with phone contracts....  image

The problem with phone contracts....

If I had a pound for every time I’ve heard “I’m in contract and there is no way I can get out”…

Getting out of a phone contract agreement can sometimes seem impossible.  However, this is not always the case as we have helped many clients leave contracts early.

“So, what are the tricks then?“, I hear you ask.

I would answer, “Not so fast, take a minute to consider what you are trying to do“.

First, read your contract and look out for phrases such as “Break”, “Term”, “Get out”, “Early Termination” or “Termination Clause”.  Look for misspellings or contradictory statements and check dates especially if hand-written.  If you have a really old contract check how this has been renewed in the past as changes in December 2012 OFCOM banned automatic renewal of phone or broadband contracts without prior consent for residential clients or businesses with ten or less employees – Taken from OFCOM site here and here.

The key reasons why you may have a claim are as follows:

1. Overcharged

The price you pay for services can be considered if you feel you have been involved in fraud, i.e. your contract was deceptive in what was offered and what was received.  We had a situation where company managers have been offered iPads and iPhones to sign off the deal with the Company Director.  When the Director became aware he had been charged for devices which were hidden on the contract as “Sundry Items”– £2500 worth of them, he declared that he had been misled, sacked some managers and threatened to sue the supplier.  The supplier was then willing to cancel the contract rather than face litigation.

2. Bad Service

Where a service is supplied the contract may stipulate SLA (Service Level Agreement), SLG (Service Level Guarantee) or up times.  When a supplier fails to meet contractual obligations and are given sufficient time to improve, the supplier could be deemed as breaking the agreement for failure to supply.  We have a client who documented 45, A4 sides of his supplier failing to meet SLA or issues that were not addressed by the supplier within a reasonable time.  A solicitors letter detailing this was sent to the supplier at a minimal cost to the company and the supplier agreed to cancel the contract.

3. Badly written contracts

We would recommend reading through the contract and ensuring every item is correct.  On two occasions we have seen contracts written off due to errors.  On one the date was incorrect, where a “1” could not be distinguished from a “7”.  On a second contract the signature on behalf of the company was made by a manager who did not have authorisation to sign the contract to the total value agreed upon.  It was argued by the supplier it was not their responsibility to prove the person was authorised however on a separate paragraph it stated the supplier had undertaken to ensure the signer was authorised.  On both occasions the service companies agreed to waive exit fees rather than incur legal costs in defending the contract.

4. Mid-Contract changes

These are where the supplier makes changes to the contract which you deem to be unreasonable or “Material Detriment”, including price rises or changes to your service.  Even if the supplier stipulates in the contract that they may increase prices this could still be considered material detrimental.  OFCOMS Guide on “Material Detriment” can be viewed here.

5. Ending contracts early

Usually the reason for this is the current contract is holding you to old equipment or the amount being paid for calls or added services is inadequate or costly.  We have found that on a number of occasions “Buying Out” of a contract early can save costs in the long run.  Especially if call costs are expensive.  A recent client we have helped were in the costly situation where a contract was six months from the end date however the client was paying 50p per minute for calls.  A quick calculation showed paying off the £300 left on the contract could be redeemed within the first three months by looking at the call costs alone.  Similarly where a multiple number of landlines are in the contract but not required for VoIP, an example where a client had eight lines at £240 per month was reduced to £30 per month highlighting that cancelling a contract early made a saving for the business of over £1000 per year.

Lastly, not all contracts are badly written, most are fair and protect the customer and the supplier.  However if you feel this is not the case we would recommend taking legal advise from a solicitor who deals specifically with contractual issues and who can advise where you stand.

If you would like to discuss contracts, buying out of your Contract or wish to discuss any aspect of supply or support for services such as Broadband, Phone Systems, Phone Lines or Virtual Numbers call Mark at Numberite on 01392 241666.