/ 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
phil says:
2 October 2012

surely this sort of undercover price rise is illegal. i was told i was taking out a fixed contract for 18mths yet they now have put up the price, i was not told that this fixed contract is really a variable contract and even if it is in the small print then it should have been pointed out at the time that they could do this as it is a significant change.As three have effectively broken the contract then i should have the option to leave it when i want and not be stuck in it for the remainder of the fixed term. I dont think i would be allowed to reduce my fixed price as i said at the time it was quite expensive so i want now to reduce the monthly price. it should work both ways.

Rory says:
2 October 2012

Well it’s nearly 5 months since I left T-Mobile and despite god knows how many letters and calls from them and/or their debt collectors for over £600 in cancellation charges they still have not yet sued me – why? Because they know their unfair contract terms are unenforceable – not least of all as it is too difficult for them to refute my contention that the increase was of material detriment.

Re: the above undercover video evidence.

For technical reasons I haven’t been able to view the video(s), but from the descriptions I have read surely it must be clear evidence of the commission of offences under the Consumer Protection from Unfair Trading Regulations 2008, specifically, bait advertising prohibited by section 12 and Schedule 1, paragraph 5?

Have you (Which?) passed the evidence to Trading Standards and/or the Police/CPS? If not, why not?

I am intrigued by the value of the increases.

The cost of most peoples contracts consist of 2 parts. (a) the phone cost spread over the contract length (b) cost of inclusive allowances. The phone has been supplied and paid for, so cannot increase in cost. The allowances could increase (but as argued here, were pre-purchased at a pre-set rate for the financial planning of all concerned). Therefore, any possible increase should be inflation /RPI / cost of living on the inclusive allowances only, and any termination fee, VAT charged on the phone element only. As the phone cost for most people is at least 50% of the contract price (100 pound phones are usually on lower included bundles, 500 pounds ones on higher priced ones), max expected increase in costs should surely be 1% – 1.5% not 3% or 4%. And also hardly worth the antogonism of current customers, way more easy to add to new contract prices (often being advertised for less than existing ones – insult to injury comes to mind). With continued low interest rates (when most people 1-2 years ago expected them to go up – at least a bit), costs of the loan on the phone cost should surely have gone down (balancing any increase in airtime costs).
Either way, cannot see why increases are needed or justified at the level that they are – unless on SIM only deals, and we are back to no VAT on services not supplied.

saranjit says:
30 November 2012

Hi I just whistle blowing against the Vodafone which I had experience 5 months ago. They sent me refurbished (used phones) on my upgrade the contract. I found It because I got technical mind . I reported it and it’s replaced by another used phone again instead of new. It was HTC one x and then they offered me new Samsung s3 on top of more discount . But after 5 months I’m still waiting for discount. Now some special people looking my account so they are very rude and manner less . They told me you won’t got any more discount that’s all or if you keep ringing we will suspend your line n charge the money to calling customers services. So anybody suggest me what I have to do . Thanks

bbeardon says:
1 December 2012

I hav e a serious issue with Vodafone over miss selling as i recently added another phone to my contract as i was called by the outreach team saying i could have this special offer which was a samsung ace with 300min calls 250mb data and unlimited calls to vodafone numbers all for £12 per month well i took the offer as well.
well the first time i checked the account using the app it said unbilled charges of £52 as i had used 180 mins over my 300mins so i called them up today and suprise suprise there are no vodafone to vodafone mins included now the lady said they would take off the bill but as far as im concered thats not what i agreed to
does anyone know what i can do as i want to cancel all of my contracts with them but i have 3 totaling £120 per month and i cant afford to pay the cancelation fees as the contracts are nearly new so about 23 months left
please advise me
Bill

jamie phillips says:
20 January 2013

I recently got the optimus 3d from e2save on tmobile, I signed up for 600 mins unlimited txts and internet £26 per month. I did not realise till first bill came through a few days ago that they have actually signed me for only 100 mins, and even though i rang tmobile the day i received the phone and capped it they have sent me a bill for £116 as they say i had to wait a month to cap it which i was not told at the time. Can any body tell me what I can do as tmobile refuse to waver the bill and e2save are no help at all as they stated i have a contract and i have to abide by it. can any one advise me is there anything I can do.

Jennifer Slater says:
7 April 2013

FIXED means fixed surely !! its a scandal
Unless customers start voting with their feet they’ll forever get away with taking the mickey.
People should sue these phone companies …a contract that says FIXED price should be concrete IF the phone company raises its prices then the customer should be allowed to CANCEL their contract but its all one way with them …. I’m voting with my feet and buying my own phone and sim card ….it’s Mugs game !!!

You forget one thing – the contracts are NOT advertised as fixed (can you find me an example that is?), the problem is that they are interpreted as fixed by those that buy them and, scandalously, by some of those that sell them. I support the “fixed means fixed” campaign, but I don’t think you will find the word being used in the mobile phone companies’ advertising.

Chris Gordon says:
13 September 2013

Vodafone have found a new way to make extra money out of their “customers’. I have just been told that from next month Vodafone will charge me £3.53 a month to pay my £10 a month sim card deal if I don’t pay by direct debit. I find this outrageous; their payment system in automated in any case so no costs incurred to speak of in making the payment. A couple of months prior to this, Vodafone decided to charge £5 if you paid after the set day; in many cases my bill hasn’t even arrived by the day set, and I pay for itemising billing. Bye bye Vodafone……

I have three EE sim only contracts and one mobile wifi device contract with EE. I have to pay direct debit fee of £3.50 if i dont pay by direct debit, so I’m using direct debit. Also they charge VAT on top. And on my EE online accounts it doesnt say which kind of charges outside plan, just says price. I mainly use WIFI on mobile phone when i’m at home. My t-mobile contract disconnected (finished) today, I cancelled it in september and it was due to end. Nowadays, they cancel the contract when its the due date, from ringing them, but can take weeks to disconnect as they say needs 30 days notice.