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The Problem with Phone Contracts…

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”…

 

 

There are plenty of professionals paid lots of money to put together contracts to keep businesses in a contract so you can imagine getting out of a contract agreement can seem impossible.  However, this is not always the case as we have helped many clients to leave contracts early.  By being able to offer the customer phone services at such a discount it allowed them to buy out early to save costs in the long term and receive the service they were paying for. In this blog, we discuss contracts that include Phone Lines and Broadband.

 

 

 

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“.

 

 

 

Firstly read your contract then get someone more qualified to read it. It is likely your contract was written by a professional so watching Judge Rinder does not qualify you to understand the terms. However if initially, you choose to do it yourself 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 the law in 2012 now bans automatic renewal without consent if you have ten employees or less.

In December 2012 OFCOM banned automatic renewal of phone or broadband contracts without prior consent for residential clients or businesses with ten or fewer employees – Taken from OFCOM site here and here.

 

 

Next, consider why you want to break a contract as just because you think you are paying too much will not wash with your supplier.  However 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.

 

 

 

Getting out of contract where bad service is received – 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 is 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.  

 

 

 

 

Badly written contracts or minor mistakes – We would recommend reading through the contract and ensuring every item especially handwritten 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 the authorization 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 authorized however on a separate paragraph it stated the supplier had undertaken to ensure the signer was authorized. On both occasions, the service companies agreed to waive exit fees rather than incur legal costs in defending the contract.   

 

 

 

 

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.

 

 

 

 

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 was 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 multiple numbers 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 advice from a solicitor who deals specifically with contractual issues and who can advise where you stand. 

 

 

 

Finally, 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 Business Phone Numbers call Mark at Numberite on 01392 241666.  

 

The above are thoughts of Numberite and all anecdotes, while a matter of fact should not be used as proof of the fact. Any inaccuracies or mistakes will be addressed within this blog or future blogs. We do not go out to offend or degrade other people or companies but anyone offended should make this clear and we will address as required. 

 

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Mark Bonito
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