/ 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

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.

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.

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.

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.

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.

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.

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.

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.

Rich says:
15 August 2012

Some of us challenged Three, and managed to leave without incident. At what point will the advice of Which? change from protest-payments to customers demanding the rights initially disallowed by Three? Will it ever be more than sitting on the fence and handing over more money to an operator who breaks their own terms?

phil says:
2 October 2012

i challenged three and they completely ignored me so i will leave at the end of my contract but will still retain the right to fight for MY money back. I have also had a thought that this is probably due to the need to raise more capital for the auction of the “4” network rather than the cost of inflation as they are stating. watch this space and see how much they pay for the new network. if it was due to inflation then they wouldnt have any money to bid in the upcoming auction

Mimoo says:
16 August 2012

As well as the fixed priced contracts for mobiles (My 24 month contract was raised by Orange), how about looking at Internet broadband providers who give you a contract promising no restrictions or traffic management, only then to find your service is restricted greatly and it seems to be having the greatest effect on game consoles.
The said company then claim they are within their rights, despite signing a contract to the contrary!!!!

Contracts are obviously only there only to benefit the provider and not end user.

Hello Mimoo, we’ve actually written a few Conversations about this – broadband throttling: https://conversation.which.co.uk/tag/broadband-throttling/

I have a contract with Orange for both mobile and home phone/broadband, I received an e-mail this week informing me that some calls, mainly 0870 and 0844 will be increased,will these increases also be looked into?.

If Fixed means Variable,
then this is misleading.
Misleading for financial gain sounds rather like Fraud.
Are any prosecutions contemplated?
Can preditory traders be brought back into honourable sustainable business ethics?
Keep up the good work,
Regards,
Doug Knox.

I agree this info should be up front when you get a so called fixed contract .One question why was O2 quoted in the opening blurb when in fact no video was shown of a shop visit?

anon the mouse says:
16 August 2012

Because O2 at least say in big plain clear letters in the documents that they may put prices up once a year by upto inflation….. I’m not sure why, but they felt no need to hide it and in fact decided to be upfront with customers about the Terms and Conditions.

derk says:
16 August 2012

the mobile companies should stop trying to rip people off for ages now they have been telling you the public that if you pull out of a contract you will have to more or less pay up in full for the rest of the contract so come lets not be one sided if the mobile companies put more charges on you 24 or 18 month contract does that in my mind means that they have changed the original one thus breaking the contract too so really you could refuse to pay them for the increase and terminate it as they are in breech of it

C Ashley says:
17 August 2012

I am currently trying to cancel a contract with T mobile as I was misled on several issues at the point of sale: for one I was told there was no cooling off period – so only after total depression at my rubbish 2 year contract did i return to a store after 6 weeks, only to be told I should have gone within the 2 week period. I was also told I had good coverage in my home area – it is so bad I cannot make a call; and that it is easy to link a Galaxy to a Mac (cannot transfer files despite downloading the relevant ap). I am now waiting to see if they throw the small print at me and expect me to pay up the 2 year contract, or if we can agree grounds for a negotiated settlement. Any sensible advice welcome. This is not about changes in a ‘fixed price’ but about information at the point of sale.

rory says:
17 August 2012

I was a couple of months into a 2 year contract with T-mobile when I was told of the price increase. I said it was of material detriment and I left T-Mobile. I then endured 5 weeks of hassle from T-mobiles debt collectors (capquest) who allege I owe over £600 in cancellation charges. I referred the harassment to the OFT and trading standards and to date I have heard nothing further from T-Mobile or capquest. (aside from their price increase T-mobile also out of the blue started charging £2 a day for “mobile network” i.e. using your phone as a network hub.)
I can emphatically state that if and when T-mobile ever take me to court (which I was informed is extremely unlikely) I will also refer to the time in their shop when I accepted the 2 year deal. At no stage was I ever given an opportunity to fully read all the terms and conditions and I can definitely remember the sales assistant insisting that in the next 2 years I would only pay more than the fixed amount if I exceeded the allowance. I was conned, duped and mislead by T-mobile who are still reluctant to settle this issue in court despite my 3 letters to them and their agents asking for them to sue me.

I was a victim of Orange’s price hike mid-contract! Iam now with O2 regardless of the cost-Orange’s loss NOT mine!!

This has happened to me with T-Mobile Customer Service . I was told that it was a fixed rate contract and then 6 weeks later the price rises. But i blame OFCOM . It is a total waste of taxpayers money . This is simply a CON and if they are not either capable or able to stop this then whats the point of having a regulator . The phone company bosses must be laughing their heads off all the way to the bank !!!!!!

I don’t know how this is handled in Which’s complaint but I think it is fair enough that changes to the VAT rate are allowed to be applied to the price paid by the customer (up or down) but inflation-linked rises should definitely not be allowed for the duration of a supposedly fixed price contract.

Hello Kevin, thanks for the comment. The reference by the shop assistant to VAT is included since they say price rises would only occur if there was a rise in VAT. And as we can see from the RPI price rises, that just isn’t true!

So, according to Which? fixed should mean fixed for mobile telecoms contracts.

Is it therefore fair to assume that Which? would like to see the consumer losing service if they forget to renew and, of course, be forced into renegotiating terms at the end of the contract minimum period?

Which? seem to have ignored the fact that current contracts ‘roll on’ invariably at the same subscription rate at the end of the contract minimum term and do not lapse at the end of a fixed period.

I also assume that Which? would also like to see Telco’s refuse to allow customers to upgrade or change their tariff mid term, or to disconnect without paying the full remaining contract cost if ‘fixed’ was to mean ‘fixed’.

If you’re campaigning to ensure that T&Cs are better understood and communicated at the start of the contract period, and that retail staff are better informed, then I would support Which? in full. However, as this campaign would seem to be as much to the detriment of the customer as the telco in the longer term I’m not sure where the benefit lies.

Hello BE, we don’t want anything to happen that would be to the detriment of consumers. Our Fixed Means Fixed campaign concerns all features of the contract (price, minutes, data) staying the same for the initial length, without any surprises.

Consumers would still be able to attempt to renegotiate the features of their contract to be of benefit to them, but that would have to be with the agreement of the company (as it is currently). Instead, companies didn’t negotiate these price rises with their customers, they were imposed upon them, and in most cases without the customer being aware that such action was allowed (as our undercover investigation shows).

We are also not huge fans of rollover contracts, as consumers can often get locked into something they didn’t feel they had agreed to, and do not have the option to switch to a better deal. Our previous investigations have concluded that we don’t think the onus should be on customers to opt-out of rollover contracts, instead companies should ask whether the customer is happy to stay with them once their initial contract period is up. That then gives you a chance to negotiate for a better deal or switch to another provider. https://conversation.which.co.uk/technology/ofcom-auto-renewal-contracts-ban/

rory says:
17 August 2012

The reference in the contract to “material detriment” is not defined in the contract, therefore unless you’re a high court judge how could you possibly know if you can or can’t get of the contract without penalty when the price increases. T-Mobile said to me the monthly charge would remain fixed for 2 years at no time did they ever say it might increase.
The problem facing most people is how to prove what was or was not said at the time in the shop particularly as T-Mobile are not making an accurate recall of events. I’m thinking of serving a subject access notice under the data protection Act requesting CCTV footage of the time the contract was signed as this may help prove the truth. I doubt it will work however the morale of the story is to always make sure you have a witness when you agree to any mobile phone contract.

Thanks Rory,
It is clear from your experience that at least one of the companies does not believe it could win in a court of law.
Perhaps the regulator ought to give some value and become active in this area.
Doug Knox.

Durr says:
19 August 2012

I wish ofcom would pull their finger out and just say a big fat “NO.” to these companies using bully tactics to squeeze even more money out of you while forcing you to stay with them. They should also should force companies to allow us victims out of our contracts free with the offending companies over the past few months… But I suppose all they care about is the £££ from the 4G spectrum auctions.

I am still being forced to pay my contract to Three after being on the end of disgusting customer service attitudes, price rises, obnoxious “executive office”, the TrafficSense debacle and consistently crummy signal; no one is helping us. I am glad Which? has started a campaign, but it’s not helping us already in a contract and who have been affected.

Matt says:
20 August 2012

Im fully in support of this issue, but I do think that it is a simple one in that most people would just be happier if this issue was either made clearer, or added, to the T&C’s of the contract. I think we all realise that price rises can, and, at some point, will, rise, and not just on mobile phone contracts, but lets see this clearly documented and not have inept members of staff lie to us.

Having read all this with interest I now find myself the subject of a price rise from Vodafone. I have been with them years now and I have never been told that my contract could go up and like many I have never read my t n c’s, surely there is a breach somewhere and if there is you should be allowed to opt out of the contract? My monthly payment is going up by 0.90p and is allegedly under the rate of inflation Vodafone are also getting rid of Vodafone passport and replacing it with a £3 per day charge if abroad!!! As far as I can see you have to ask for this to be applied.

I think it stinks that the mobile phone companies have got you by the short n curlys and can alter alleged fixed price contracts!! Where will it end??

Hello Mandy, we’ve written about Vodafone’s second price rise here: https://conversation.which.co.uk/technology/vodafone-line-rental-price-rise-mobile-phone-fixed/ We’re not happy, so please join the debate. Thanks.