/ Technology

Misled over your mobile contract? We went undercover

Lock and key on phone

Did you know your ‘fixed’ mobile contract can go up in price? No? Maybe that’s because, as our recent mystery shopping reveals, many phone shop assistants don’t explain that at the point of sale.

Last month we launched our Fixed Means Fixed campaign following your complaints about price hikes from four of the main mobile providers.

One commenter, Keving, argued that, ‘the possibility of [the monthly price] changing is never pointed out at the time of sale’. We had a suspicion that this might be close to the truth, so we decided to go undercover.

Customers misled over fixed prices

We sent our team of mystery shoppers to 39 mobile phone shops across England who posed as customers interested in taking out a new contract. We wanted to see whether customers are told that phone companies can increase the monthly price despite the contract being fixed.

When the shop assistants initially explained the deal on offer, an overwhelming 92% failed to explain this to our shoppers. And, when we asked directly whether the price would be fixed, 82% of assistants said the price would stay exactly the same for the duration of the contract.

The shop assistants explained this with responses including, ‘we legally can’t [raise the price] because you sign up for that contract for 24 months’, and, ‘everything will stay exactly the same for the whole two years’ and that this was ‘fully guaranteed’. We were even rather ironically advised that the phone contract should give us ‘total peace of mind’, because the price can ‘never change’.

Have a watch of our undercover video for a snapshot of what we found, and how Vodafone, Orange, T-Mobile and Three Mobile responded to our findings:

Later in the conversation our shoppers mentioned the recent price rises by four of the major phone companies, but even then, 28% of assistants still insisted that the price was fixed.

Those 72% that did eventually say the price could change often gave very confused explanations about the reasons, with few mentioning that they were imposed by the phone companies themselves. One assistant blamed the price rises on Ofcom, a second said it ‘mainly affects pay-as-you-go customers’ and a third claimed prices would only go up ‘if the government changes the VAT’ – which is all nonsense.

Our campaign – pledge your support

To sum it up, our research shows that even the companies’ own staff think that ‘fixed’ applies to the price. We’re not happy, and neither are you – over 18,000 of you have backed our campaign so far.

So, there clearly is a problem with the way you’re being sold phone contracts. However, we don’t just want clearer T&Cs and better trained shop assistants, we want fixed phone contracts to really mean fixed. Were you told that your phone contract’s price could change before you signed on the dotted line?

Comments
Member

Until the companies remove the clause that prices could rise during the life of a contract, they should refer to them as VARIABLE PRICE CONTRACTS to alert customers to the issue.

Member
Rich says:
15 August 2012

That clause should work both ways – if the company is granted the right to increase the costs by no more than the measure of inflation, the customer should be granted the right to decrease the cost of the contract due to rising inflation. The consumer is more likely to be feeling the pinch of inflation than the company.

Member

I see your point Rich but I think it would be simpler just to have a fixed price. Companies can plan for inflation and find other ways of rewarding customers.

Member
Aubrey Escoffery says:
15 August 2012

I have two contracts. The Virgin contract attracted an approximate increase of about 20% during its 18 months term which ends in October whislt, the Three contract has attracted an approximate increase of 3% and I expect further rises before its end in October 2013. I should have been able rely on the priciple of equity in this reagrd.

Member

Wow, this is absolutely shocking and just goes to prove that a confusing term, buried away in the Terms and Conditions, isn’t enough to inform customers that their prices can go up. Even the phone company’s own staff are unclear on the price rises.

Earlier this year when I joined Sky, they were very honest and told me that some prices may rise within the year and told me how much that might be. Essentially it’s around the same increase as Orange put my contract up last year but I was more than happy to accept it in Sky’s case as I’d been fully aware of it before signing the contract.

Orange on the other hand had a term buried away in their Terms and Conditions, linking potential price rises to an inflation figure I had no knowledge of and as I’d signed up for my contract through a 3rd party reseller, had no way of knowing for sure that these were the actual details I’d agreed to. Nevertheless, I cancelled my contract at the end of the period out of principle and moved elsewhere.

Member
anon the mouse says:
15 August 2012

So what you have proved is that Good faith applies and that if the sales people are stating that the price is fixed and then the price changes (buried term in the T&C).
Then they are actually misselling the contracts, misleading the customer and ultimately making unenforceable contracts by not explaining the terms clearly or truthfully.

Member
Rich says:
15 August 2012

A nice quote from Three, there.

“It is important that anyone committing to a contract understands it. We are actively briefing staff to help fill in any gaps. Proportionately more Three customers choose a pay monthly contract than any other network.”

If their own company cannot understand, or – more likely – agree to follow the terms set out in the contract they have provided, what possible hope is there for Joe Consumer?

Question for Three – did you understand that your customers were contractually entitled to leave following your recent price increase? Or were you just being deliberately obtuse?

Question for Which? staffers – do you have any further updates for the customers of Three who followed your advice of “paying under protest”? You know the ones – they commented on here in huge numbers. Should they still be paying for a contract, despite having been given sufficient reason to leave?

Their price-increase clause made direct reference to the clause detailing how the consumer has the opportunity to leave without penalty for such changes; they are distinctly different to the other mobile telephone operators in this regard, and should not have been treated in the same manner.

Member

Hi Rich, in response to your questions about paying under protest – absolutely. If you have complained to Three and made it clear that you are paying under protest you are effectively reserving your rights (meaning that you can still challenge the price rises). It’s a way of making sure you are not in breach of the contract while you challenge their action. We have explained this on other Conversations, but I suspect some of the responses might be a bit lost now that there are so many comments on them.

By paying under protest you make it clear that you do not accept the price rises, and are able to challenge Three on the issue should you wish. It also means that if later on you find others have successfully challenged Three, you are in a position to do the same, as you have not accepted the rises.