A question about : EE/Orange/T-Mobile
As promised on the EE.T-Mob.Orange. Change T&C From 26th March 2014 thread:
https://forums.moneysavingexpert.com/...88862&page=103
And Mobile Phone Contract - Price Rise Refunds Thread:
https://forums.moneysavingexpert.com/...818999&page=71
This new thread is to launch a NEW campaign with the following aims:
To have all sums paid over and above your original contract price under the price variation clauses refunded
To have contrast cancelled PENALTY free (from 30 days after you first contact EE/Orange/T-Mobile
and as a side issue
Try and get Ofcom to take some action!
On the first aim we have won cases in the past (I have 100% record in my own cases, we have a 75% success rate overall) and during March this year EE have effectively admitted that their price variation clause in contacts before 26th March was unenforceable! - so I expect a very high success rate
On the second aim we have a 97% success rate BUT that was on claims made within the 30 day claim limit - success on this is dependant on proving that EE have not used correct procedure when notifying the change in T&Cs - if we get past that hurdle than another 97% success rate should be possible! -Am 95% certain we can overcome this hurdle!
The side issue - OFCOM have consistently sided with EE even when consumers have won 97% of cases heard by adjudicators trained in Telecommunications/Contract matters. No matter what evidence is produced to show OFCOM should be taking action they ignore it. So my hope here is that if enough people send them emails (copying in the media) eventually a media outlet will pick up on the story and OFCOM will be shamed into action. - you can help by sending email Ofcom FMI-5-x from the following site:
https://fightmobileincreases.com/pressure-ofcom/
In addition to refund and cancellation, depending on how EE respond we may also be able to obtain some compensation for EEs behaviour (Ј50-Ј100 being typical amounts).
I will post details later on what needs to be done, but rest assured this is RISK FREE and costs you NOTHING! and for the aim of having previous price rises refunded - you do not even need to still have a contract!!
Best answers:
- I should say right up front that I have no legal training, and any action you take from my posts is at your own risk. However that risk should be ZERO as the cost of following the advice is ZERO and the worst that can happen is that you do not obtain the refund or contract cancellation.
I will refer to EE, Orange and T-Mobile collectively as EE (Oh my God I’m sounding like an EE contract – heeeelp)
The steps you need to take are as follows, I am assuming that EE will be true to form and try to dismiss your claims –which works to your advantage in the long as it is EEs responses to initial emails that generates the case for compensation.
Step 1 - Email EE requesting a refund of all sums taken over and above the originally agreed contract price (applies to all contracts – even those that have finished)
- And if applicable – Contract cancellation due to the change in T&Cs effective 26th March (contract cancellation is not applicable to those whose contracts ended before 26th March 2014 OR T-Mobile customers on V58 of the contract (contracts stared pre 30th October 2012)).
- EE will probably respond with a polite "No" and quote some legal jargon regarding GC 9.6.
- Email EE restating your position and request that they send you a deadlock letter so that you can take a case to CISAS (the independent adjudication service) Again I will provide a standard Email for you to use.
- At this point EE will either:
- Still attempt to ignore you – in which case I will supply further template emails
- Provide a deadlock reference (they usually need to be “harassed” 3 or 4 times before grudgingly saying that they will not communicate further (which acts as a deadlock reference anyway)) OR
- (And I’m 99% sure this won’ happen) EE will give in and process your refund/cancellation or both.
- Assuming EE will not comply with regulation without a CISAS decision then we need to move to step 3
- I will post a statement (claim) for you to email to the adjudicator
- EE will submit a response (defence) to the adjudicator
- you then respond to that defence (again I will provide a standard email) It is vital you respond to the defence as the adjudicators take everything that EE will say as being factually correct – even when it is not! So you have to discredit their arguments or you will lose!)
- The adjudicator makes their decision - you win or you lose.
- First of all a big THANK YOU to MSE for "reserving" the first 32 posts for me. The intention is that I will post the relevant emails, CISAS case and Defence responses in these posts as we go through the process so they are easy to find! I will still "join the debate" in the posts below #32.
An important document that EE may have sent you that will almost guarantee a victory in reclaiming your previous price increase is available on the FightMobileIncreases.com website ( https://fightmobileincreases.com/comp...gn-against-ee/ ), it is the document titled "Clearly and ad ex 21" (Clearly and adequately explained). This was the document which I presented as evidence to CISAS that had my price increases refunded AND Ј50 compensation awarded as it was deemed to be so misleading.
Basically for the price variation clause to be enforceable it needs to have been "clearly and Adequately" drawn to your attention. As you will see the "welcome Letter" claims to show the important points in my contract so that "..there are no surprises..." and guess what - no mention of a price variation clause. If you have a similar document you have as good as won the refund already!
If anybody more technically skilled than me wants to post that document on the MSE forum please feel free to do so. - Okay the first email to send to EE. I have kept it brief as we will develop the argumenst as we progress, this is partly to give EE some room to come up with excuses which can use to against them to claim compensation
Update the Green text to suit you circumstances and delete the RED text if you do not have a welcome letter (see post #3). Do not delete the rest of point one unless the price variation WAS clearly and adequately drawn to your attention. The Welcome letter is merely documented proof - there is plenty of other evidence we can use too!
Send to:executive.office@ee.co.uk; Olaf.Swantee@ee.co.uk
DATE:
Phone Number(s) 07XXX-XXXXXX
Dear Mr Swantee
Price Rise Refunds and Penalty Free Cancellation.
The purpose of this email is twofold
1. To request the all sums taken from my account which are over and above the originally agreed contract price are refunded for any price increase that has been applied to any contract that I have held with EE at any time over the six years. My request is based on my belief that the price variation clause which EE have relied upon would fail the test of fairness under several headings of the Unfair Terms in Consumer Contract Regulations1999 (UTCCRs) the list below is not exhaustive:
1 The price variation clause was not clearly and adequately bought to my attention at point of sale (see attached welcome letter);
2 the price variation clause is not narrowly nor precisely defined
3 due to the constituent elements of the contract an RPI increase cannot be a true reflection of cost increases incurred by EE, and therefore the price increase has been used to suit EEs own needs which is strictly forbidden under the UTCCRs
5 the price clause is discretionary - there is no reason given in the contract as to the circumstances in which a price rise can be applied
6 EE cannot pass the risk burden of inflation to me in a short term contract
7 EE have informed Ofcom that they can predict future cost increase with some certainty - I therefore have no way of knowing what inflationary factors were already taken of account of.
2. Secondly I request that this email is deemed as my 30 day notice period for a Penalty Free contract cancellation following EEs change in T&Cs which was effective 26 March 2014. As the change clearly purports to give EE the right to increase my contract price by a larger amount than was previously the case (Exclusive use of RPI in the new contract rather than lower inflation rates such as CPI as was the case previously) and therefore under both the UTCCRs and Ofcom GC 9.6 I am entitled to cancel my contract penalty free and I request a PAC code is provided by return. I would further point out that I believe the notification received via text of the change in T&Cs is so misleading in its phrasing that the true implication of the change was not clearly and adequately bought to my attention and is evidence of EE not applying the level of Professional Diligence from a company of its size and experience and has caused a Material Distortion under the Unfair Trading Regulations 2008. This also demonstrates a lack of operating in a sprit of Good Faith.
Please refund all sums taken over and above the originally agreed contract price under your price variation clause, and provide a PAC code (Penalty Free) for my use within the next 30 days.
Regards - I have posted various versions of EE T&Cs on the FightMobileIncreases.com website for ease of reference, plus details of the notification of the change in T&Cs and a table showing all price increase the have been applied.
https://fightmobileincreases.com/figh...nd-conditions/
Email 1 is also available to download:
https://fightmobileincreases.com/figh...gn-against-ee/ - If EE ignore your email, then after FIVE working days, resend it stating that they have not responded. If after another 5 working days there is still no response then send the email below and copy in all of the addressees’ below
Ofcom:
OCCtelecoms@ofcom.org.uk;
Lynn.Parker@ofcom.org.uk
graham.howell@ofcom.org.uk
Ed.Richards@ofcom.org.uk
EE
olaf.swantee@ee.co.uk
The Media
Edwin.lane@bbc.co.uk
joel.taylor@ukmetro.co.uk
your.problems@observer.co.uk
Me
Info@fightmobileincreases.com
Dear Mr Swantee,
It has now been X days since my last email, copy attached..
I find this level of customer service unacceptable and falls well short of the standards it would be reasonable to expect in a matter of this importance.
I have included my previous email and related correspondence for your convenience.
I would also like you to confirm how ignoring my emails to date compiles with Ofcom GC14 on complaints handling. I understand that Ofcom are currently conducting an investigation into EEs complaints procedure and I have copied this email to Ofcom so they can add it to their evidence file
Regards - Response from EE re Email 1 (post #4) – Note that the response below has NOTHING to do with the points raised in email 1!
Thank you for your email dated X/X/2014, received in the Executive Office, I have been asked to respond on behalf of EE.
I am sorry you are unhappy with the recent increase to our prices and some of our services. As a company we are committed to investing significantly in our network and work hard to give the best value for our service, we have in this instance tried to keep these increases to a minimum. However due to rising business costs linked to inflation we have had to revaluate our pricing structure.
In this instance, the increase to price plans is in line with RPI at 2.7% and compliant with the Terms and Conditions of your contract. Our Terms and Conditions give us the right to increase the cost of our services and this change does not give you a right to terminate your contract. Please refer to clause 3.7 in your Terms and Conditions.
Whilst I understand this is not the outcome you were looking for, I trust I have clarified EE's position regarding this matter.
Yours sincerely
Response to send:
Dear X,
Thank you for your email dated X, however you appear to have ignored the contents of my email, which was not about the price rise of May 2014, but rather is in connection with ALL previous price rises and the change in T&Cs effective March 2014 for which EE never provided the correct notification.
I have attached my original email and trust that once you have fully digested the contents you will provide the penalty free termination and the refunds as requested.
Regards - Response from EE re Email 2 (post #7) – Note that EE have still not given permission to go to CISAS so you need to send Email3!
Thank you for your response. I apologise I did not cover the change in our Terms and Conditions in my previous email.
Whilst your comments are fully acknowledged, when you entered your current agreement, our Terms and Conditions at this time allowed us to change them during the minimum term of that agreement. They also laid down under what conditions a customer would be able to leave their agreement without penalty.
Under General Condition GC9.6 a customer has the right to cancel their contract without paying a cancellation charge but only where the change is likely to be to the customer's material detriment. The notice we have issued to our customers is not a notice whereby the change is of material detriment, as such there is no entitlement for customers to cancel their contract without charge.
As a company EE does not accept there has been any material detriment due to the recent proposed change in its terms and conditions. Under these circumstances any request from its customers to be released from contract without penalty will be declined. Any customer wishing to cancel their contract may do so by providing the relevant 30 days notice period required but they will be held liable for any early termination fee.
Given the above, as you are in commitment until 10 October 2014. Should you still wish to cancel your contract, you would be liable for the remainder of the minimum term's charges. If you are happy to pay the Early Termination charge, please do not hesitate to contact me on 0800 079 0032 between 8.00am and 8.00pm Monday to Friday.
The company, EE, have fully complied with the General Conditions set out under Ofcom regulations and as the previous emails and this one sets out fully the final position EE has taken, no further discussion will be entered into with regard to this matter.
Yours sincerely
Response to send to the above :
Dear X
Thank you for your email dated X
I note that despite three emails on the subject EE have yet to address my request that ALL sums taken over and above the initially agreed contract price in any contract that I have held with EE in the past six years is refunded. I find this demonstrates a distinct lack of duty of care.
In regards to the change in T&Cs I still contend that the change – which purports to allow EE to cap price increases at RPI, whereas previously they were capped at CPI – is of Material Detriment to me under Ofcom GC 9.6. I note that other than to say “As a company EE does not accept there has been any material detriment due to the recent proposed change in its terms and conditions “ EE have not explained what criteria it has used to reach this conclusion. Additionally as you mention the terms of the contract allow EE to change the T&Cs may I remind you that the contract also allows for a penalty free cancellation should I deem a change of T&Cs to be of Material detriment to me and that under the UTCCRs EE does not have a unilateral right to determine what Material detriment means in the contractual context.
I therefore request that EE provide me with a PENALTY FREE cancellation and issue a PAC (note that the issuance of a PAC on any basis other than a PENALTY FREE basis will be a gross breach of contract); and that EE refund previous price increases as requested.
Should EE still be of the opinion that I am not entitled to the above remedies then as per Ofcom guidance on complaints handling I request that you provided me with a deadlock letter by return. For your reference I have copied the Ofcom guidance (Annex 4 paragraph 4 (c) to GC 14) below and added comments in red as to why the exceptions to issuing a deadlock letter are unlikely to apply in this matter;
A CP must promptly issue a written Deadlock Letter when requested by a Complainant, unless:
i) the CP has genuine and reasonable grounds for considering that the Complaint will be resolved in a timely manner and subsequently takes active steps to do so; orAs EE have stated "...no further discussion will be entered into with regard to this matter" then there is no prospect of resolving this issue in a timely manner
ii) it is reasonable to consider the Complaint to be vexatious; or I genuinely believe that EE have breached GC 9.6 and its own contract in regards to the change in T&Cs, and that the previous price rise clauses are unenforceable under the UTCCRs
iii) the subject-matter of the Complaint is outside the jurisdiction of the CP’s Alternative Dispute Resolution scheme. I am aware that CISAS have taken on cases in respect of EEs change in T&Cs and so this exception is not relevant – CISAS ruling extract:
“I find that:
a. The customer’s claim concerns the application of the company’s Terms and Conditions under which he is provided with a communication service. I am therefore satisfied that it relates to a communication service. I do not consider contractual interpretation to be a complicated issue of law. I am therefore satisfied that I am able to adjudicate on this dispute.”
Regards - This is the email you are after from EE (from post #8)– it allows you to go to CISAS – Interesting to note that EE are still referring the 2.7% price increase! We will use this to seek compensation!!!
Thank you for your email response.
We do not feel that this change is of material detriment to you as it is in line with the Retail Price Index (RPI), which is a measure of inflation. I acknowledge you do not agree with this decision therefore the next step would be to seek independent adjudication via CISAS.
You may refer your complaint to CISAS. CISAS will determine whether the complaint falls within the jurisdiction of its ADR Scheme. We may argue that it does not. If CISAS agrees its Scheme applies, it will adjudicate on the complaint in line with the Scheme rules. CISAS's details are as follows:-
CISAS
International Dispute Resolution Centre
70 Fleet Street,
London,
EC4Y 1EU
Email: info@cisas.org.uk
Tel: 020 7520 3827
Fax: 020 7520 3829
Please be advised no refund will be applicable.
Yours sincerely -
CISAS “step through” Guide
Before posting a template CISAS claim I thought a little step through guide to the CISAS process may be of use.
When you submit your claim CISAS will forwarded it to EE who then have 10 days to respond (submit a defence).
CISAS will send you a copy of the defence and you will have 5 days to respond the EEs defence - you do not have to respond, but if past history is anything to go by it will be a pack of lies including claiming that CISAS do not have authority to decide these cases, and that EE have not changed your T&Cs!!! So you should respond (I am happy to help if needed).
Once CISAS receive your response to the defence an adjudicator will be appointed (takes a day or 2) and then CISAS will make a judgement within 3 weeks of the appointment.
As for the application process itself it goes like this:
I will post a CISAS claim that you should just be able to copy and paste into the CISAS claim form (it is less than 750 words) which can be found here:
https://www.cisas.org.uk/Makeanapplication-25_e.html
When you follow the link above you will need to enter some details (name address etc etc) there are also some drop down boxes - most are self-explanatory, but here is some guidance:
'Dispute Type'- contract Terms
'What do you want the company to do?'
'take some action' - Give a back dated penalty free cancellation (refunding any sums taken since the contract should have been terminated) and a PAC and unlock code
'Give you money' Ј100
You will also have an option to upload "evidence" or to submit that separately by email - I suggest you submit it separately via email (as the attachments method did not work when I tried to do it that way). The evidence is just the emails you have sent EE and the responses you have received. If you have a copy of the Text they sent in February and you can "copy" it into an email then use that too. If you have a “welcome” letter scan it in and attach it. These emails/documents are the Appendix 1.x and 2.x. - Instructions – please follow carefully
Note that A WORD version of the next 8 posts is available from the Fight Mobile Increases web site. There is also an EXCEL version which is much easier to use as you just answer a few questions with a Yes or No and it produces a fully tailored CISAS case for you!
https://fightmobileincreases.com/figh...gn-against-ee/ - Read the whole document first it’s long but will help you understand what you’re trying to do, However if you find it to hard going then don’t read it BUT change/update the red text starting at the BOTTOM of the document and working upwards – otherwise the page numbers will change.
- Red Text – you need to delete the bits which don’t apply to you OR change the text to reflect your circumstances pages 2, 3, 4, 5, 6, 16, 18, 19 (page 15 is difficult to spot!!!).
- Grey text – delete it is there as a guide pages 4, 6 and 16
- You may be claiming for previous price increases only, cancellation only, or both. Please delete the sections which are not relevant to your particular claim.
- The text from “Summary” to “Correspondence is in relation to this is at Appendix 2.2 to 2.X” should be copied into the “details of claim” on the CISAS form
- I have included all contract types – delete the ones that don’t apply to you
- If you failed in your price rise claim and were informed that you should have cancelled when the T&Cs were changed then add the following at the very beginning of “claim 2” in the summary (Page 1):
- “I took a claim to CISAS following the May price increased imposed by EE, the adjudicator ruled in EEs favour but said “quote adjudicator (should have applied for a cancellation when T&Cs were changed)”
- Post 1 of 8
PLEASE NOTE THIS HAS BEEN UPDATED - SEE THE CISAS CASE ON THE FIGHT MOBILE INCREASES WEBSITE - IT IS AVAILABLE AS A WORD DOCUMENT AND AS A SPREADSHEET - THE SPREADSHEET IS MUCH EAISER TO USE.
https://fightmobileincreases.com/figh...gn-against-ee/
Summary
My claim is for two separate and distinct cases against EE.
Please note that I have only become aware of the consumer protection afforded to me under Ofcom Regulations, The Unfair Terms in Consumer Contract Regulations and the Unfair Trading Regulations, following research and taking advice after EE imposed a 2.7% price increase in my contract in May 2014. Prior to that I was unaware of the protection offered to me, and how EE have been avoiding their obligations to me under these regulations. My ignorance was largely due to EE not applying professional diligence, and using misleading behaviour when notifying me of both the change in Terms and Conditions and price rises.
Claim 1 - Refund of Prior Price Rises
I believe the price variation clauses used by EE are unfair (and therefore unenforceable) under the Unfair Terms in Consumer Contract Regulations (UTCCRs). Additionally the advertising methods used by EE in terms of the price plan names are misleading under Ofcom General Condition 23.2 (GC 23.2) and the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). I also request that the adjudicator considers this case whilst bearing in mind that under UTCCRs Schedule 2 Paragraph 1 (L) Office of Fair Trading (OFT) guidance states:
12.1 The OFT's objections to variation clauses generally are set out under Group 10. If a contract is to be considered balanced, each party should be sure of getting what they were promised in exchange for providing the 'consideration' they agreed to provide. A clause allowing the supplier to increase the price - varying the most important of all of the consumer's contractual obligations - has clear potential for unfairness.
Due to the above I request that any sums taken over and above the originally agreed contract price for the core subscription services under any price variation clause in any mobile phone contract is refunded immediately. Further I request that Ј50 compensation is awarded to reflect the anxiety caused when EE first used the hidden price clause and the lack of duty of care EE has displayed in both the drafting of the contract and then relying on a term that its legal staff should have known (as per the CPRs) was unfair under the UTCCRs.
Claim 2 - Penalty Free Termination of Contract due to a Change in Terms and Conditions.
I believe that the change in Terms and Conditions (T&Cs) advised by EE and effective from 26th March 2014 gives rise to my right to a penalty free cancellation under the contract T&Cs, the UTCCRs, and Ofcom General condition 9.6 (GC 9.6). Additionally the wording of the notification used by EE was such that it did not alert me to the fact that EE was giving itself the right to increase the quantum by which prices could be increased, nor that EE was replacing an unfair (and therefore unenforceable) contract term with one which may pass some of the tests of fairness under the UTCCRs. I also believe this shows that EE have not acted in good faith with the regards to the change in T&Cs and have breached the CPRs.
Due to the above I request that my contract is terminated backdated to 30 days after my initial cancellation request (with any sums taken from my account in connection with services from that date being refunded). Additionally I would request that the sum of Ј50 compensation is paid for EE s lack of duty of care (professional Diligence)/misleading notification/not acting in good faith due to the wording of the text notification and subsequent internet explanation of the effect of the change in the T&Cs.
Generally
It should also be noted that whilst EE have responded to my initial email claiming to have addressed all the points raised it is clear from a simple reading of my request compared to their response that EE have either not read my email or have not understood it and therefore have not responded to my request other than to allow this case to be heard by CISAS.
Details of the refund request are at appendix 1.1
Correspondence is in relation to this is at Appendix 1.2 to 1.X
Details of the Penalty Free cancellation request are at Appendix 2
Correspondence is in relation to this is at Appendix 2.2 to 2.X - Page 2 of 8
PLEASE NOTE THIS HAS BEEN UPDATED - SEE THE CISAS CASE ON THE FIGHT MOBILE INCREASES WEBSITE - IT IS AVAILABLE AS A WORD DOCUMENT AND AS A SPREADSHEET - THE SPREADSHEET IS MUCH EAISER TO USE.
https://fightmobileincreases.com/figh...gn-against-ee/
Appendix 1 - Refund of previous price increases.
Details.
The price variation clause was not clearly and adequately drawn to my attention, GC 23.2, and CPRs
One of the tests of fairness in the UTCCRs is contained in the Office of Fair Trading (OFT) guidance at 12.4 as follows (Schedule 2 Paragraph 1 (L)):
12.4 A degree of flexibility in pricing may be achieved fairly in the following ways.
• Where the level and timing of any price increases are specified (within narrow limits if not precisely) they effectively form part of the agreed price. As such they are acceptable, provided the details are clearly and adequately drawn to the consumer's attention.
I assert that when entering the contract I was not given adequate notice of the existence of the price variation clause (the most important clause of all according to the OFT) at the time of entering the contract. None of the pre contract literature (including the order summary attached) contained a reference to the price variation clause. The price of Ј31pm was only ever referred to in terms of the fixed elements of the contract (Call, Text and Data allowances) and the length of the contract (24 months), and was never qualified with a word such as "Initial" or "variable" to indicate that the price was not fixed .
USE THE FOLLOWING IF YOU PURCHASED ON LINE
At the time of purchase I did have to "Check" a box confirming I had read the T&Cs however this alone cannot constitute "adequate notice" as: - There was no secondary box to "check" that specifically stated that the contract allows EE to vary the price i.e. clearly and adequately drawing the clause to my attention
- There is no opening summary within the contract in large type drawing my attention to the price rise clause contained within the detail of the contract
- Under UTCCRs "have read and understood" declarations cannot be used by EE as evidence of clearly and adequately drawing to my attention the price variation clause as per the UTCCRs guidance issued by the OFT as follows:
- 18.5.5 'Have read and understood' declarations.
- Declarations that the consumer has read and/or understood the agreement give rise to special concerns. The Regulations implement an EU Directive saying that terms must be clear and intelligible and that consumers must have a proper opportunity to read all of them (see Part IV). Including a declaration of this kind effectively requires consumers to say these conditions have been met, whether they have or not. This tends to defeat the purpose of the Directive, and as such is open to serious objection.
- 18.5.6
- In practice consumers often do not read, and rarely understand fully, any but the shortest and simplest contracts. It might be better if they tried to do so, but that does not justify requiring them to say they have done so whether they have or not. The purpose of declarations of this kind is clearly to bind consumers to wording regardless of whether they have any real awareness of it. Such statements are thus open to the same objections as provisions binding consumers to terms they have not seen at all - see Group 9
- Page 3 of 8
PLEASE NOTE THIS HAS BEEN UPDATED - SEE THE CISAS CASE ON THE FIGHT MOBILE INCREASES WEBSITE - IT IS AVAILABLE AS A WORD DOCUMENT AND AS A SPREADSHEET - THE SPREADSHEET IS MUCH EAISER TO USE.
https://fightmobileincreases.com/figh...gn-against-ee/
Further or in the alternative
The level and timing of the price increases is not specified within narrow limits - if not precisely, within the contract.
One of the tests of fairness in the UTCCRs is contained in the Office of Fair Trading (OFT) guidance at 12.4 (Schedule 2 Paragraph 1 (L)) as follows:
12.4 A degree of flexibility in pricing may be achieved fairly in the following ways.
• Where the level and timing of any price increases are specified (within narrow limits if not precisely) they effectively form part of the agreed price. As such they are acceptable, provided the details are clearly and adequately drawn to the consumer's attention.
The price variation clause is as follows:
EE and T-Mobile post 30 October contract clause were as follows:
7.2.3.3. The change that We gave You Written Notice of in point 7.1.4 is: (i) an increase in Your Price Plan Charge (as a percentage) higher than any increase in the retail price index (also calculated as a percentage) or any other statistical measure of inflation published by any government body authorised to publish measures of inflation from time to time, and published on a date as close as reasonably possible before the date on which We send You Written Notice;
And the Orange post 30th October clause reads:
4.3.1 we give you written notice to increase the Charges (as a percentage) by an amount equal to or less than the percentage increase in the All Items Index of Retail Prices or any other statistical measure of inflation published by any government body authorised to publish measures of inflation from time to time, and published on a date as close as reasonably possible before the date on which we send you written notice;
As can be seen from the contract clause the level and timing of increases is not precisely and narrowly defined: - There is no reference as to which months RPI will be used
- e.g. We will use February RPI published in March ,
- There is no reference as to which month the increase will be effective from
- e.g. and will be reflected in al bills dated from 10th May
- The term is so loosely defined that in my short term contract I cannot tell if I will be subjected to zero, one, two, or three price increases.
- The inflation rate to be used is not clearly specified as it refers to RPI "or any other statistical measure of inflation published"
- The use of the phrase "published on a date as close as reasonably possible before the date on which We send You Written Notice" is clear evidence that the timing is not defined "narrowly if not precisely".
- Increasing prices due to cost increases incurred by EE and
- Increasing prices in line with RPI/CPI
- Page 4 of 8
PLEASE NOTE THIS HAS BEEN UPDATED - SEE THE CISAS CASE ON THE FIGHT MOBILE INCREASES WEBSITE - IT IS AVAILABLE AS A WORD DOCUMENT AND AS A SPREADSHEET - THE SPREADSHEET IS MUCH EAISER TO USE.
https://fightmobileincreases.com/figh...gn-against-ee/
Further or in the alternative
The price rise has not been used for the purposes stated in the contract
The price rise letter attempts to explain that the price rise is "Due to Inflation". I put EE to strict Proof* that the costs of administering my contract have increased by RPI over any 12 month period where EE have applied an RPI increase and that those pressures are over and above any inflationary pressures already factored into the initial price set by EE.
*The burden of proof lies with EE to prove that EE's costs have indeed risen as stated and not on me to prove that they have not:
UTCCRs Schedule 2, paragraph 1, states that terms may be unfair if they have the object or effect of:(q) ………., unduly restricting the evidence available to him or imposing on him a burden of proof which, according to applicable law, should lie with another party to the contract.
A reading of EE's Accounts for the year ended 31st December 2012 clearly states that over that period EE's Margins have increased and its costs have reduced as follows:
Quote from EE's accounts "lowering the cost base":
Our Company: Progressed lowering cost base
During the year we made substantial progress simplifying and streamlining the business to reduce costs. Our Network Optimisation programme completed the year on track. 2,659 sites were decommissioned, 39% of which occurred in Q4. We completed supply chain and retail IT systems integration. We also refurbished our entire retail estate giving all customers access to sales and service in all our stores, and announced plans to close 78 redundant stores in 2013.
We reduced indirect costs by 3.1% yoy. We achieved an annual run rate of Ј369m in gross opex savings or 83% of the Ј445m annual run rate goal and are on track for Ј3.5bn+ NPV in synergy savings by 2014.
This has improved our full year adjusted EBITDA margin to 21.2%, with H2 adjusted EBITDA margin reaching 22.0%. We generated free cash flow (EBITDA minus capex) for the year of Ј479m, following investments in network and IT transformation projects to improve the customer experience and lower long term operating costs.
Further EE's Quarter 1 results press release clearly presents to the market that the price rise was a revenue maximising initiative - it makes no mention of associated costs only adjustments to price:
Initiatives
-Introduced post paid RPI price adjustments
-Launched competitive prepaid offers in April that more effectively monetise data (T-Mobile Smart Packs and enhanced Orange Dolphin)
-Further extended 4G smartphone range
Additionally the major cost components of my contract were incurred before the contract was taken out or have decreased substantially: - The cost of the hand set was incurred before I took out my contract and therefore should have no inflation associated with it
- The Cost of the 3G network was incurred in April 2000 and so cannot therefore have inflation associated with it
- Any profit element within the contract price cannot have inflation applied to it under the UTCCRs
- Call termination charges - which are fixed and agreed and published in advance by Ofcom and have decreased over the past few years by over 50%.
- Food/Beverages
- Tobacco
- Alcohol
- Clothing
- Holidays
- Toys
- Sports Equipment
-
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https://fightmobileincreases.com/figh...gn-against-ee/
Further or in the alternative
EE's is transferring the risk of inflation to me - which it is better able to control or anticipate than me.
EE is required to take reasonable care when setting up the contract (including the price) and EE cannot transfer inappropriate risks (e.g. inflation) to me as per UTCCRs Schedule 2 Paragraph 1 (L) OFT guidance 12.3 and OFT guidance Group 18 clauses - 18.2.1:
12.3 A price variation clause is not necessarily fair just because is not discretionary - for example, a right to increase prices to cover increased costs experienced by the supplier. Suppliers are much better able to anticipate and control changes in their own costs than consumers can possibly be. In any case, such a clause is particularly open to abuse, because consumers can have no reasonable certainty that the increases imposed on them actually match net cost increases
18.2.1 A contract may be considered unbalanced if it contains a term the supplier is better able to bear. A risk lies more appropriately with the supplier if:
• It is within their control
• …….
18.2.2 Particular suspicion falls on any term which makes the consumer bear a risk that the supplier could remove or at least reduce by taking reasonable care
Proof that EE should be able to mitigate the risk of inflation can be found both by looking at the environment in which EE operate and EEs statement to Ofcom during Ofcom's review of price variation clauses conducted in 2013.
Operating Environment:
The background to EE and the UK Mobile market is: - The UK Mobile market is a mature market (20+ years);
- EE (including its predecessor companies) has over 20 years' experience within the market
- The Contract is short term; and
- The UK economy has been stable over the last few years (no hyper or unexpected inflation).
- EE HAS factored anticipated inflationary pressures into the initial price of our contract - in which case the price variation clause is not being used for the purpose stated (OFT 10.3b) and is being manipulated to suit the interests of EE (OFT 10.3 (b) and is therefore unenforceable.
OR - EE HAS NOT factored in potential cost pressures into the initial contract price when EE is best placed to control and anticipate them - thereby demonstrating that EE has not taken reasonable care when setting the initial contract price (OFT 18.2.2) has not applied the required professional diligence (CPRs), and is attempting to transfer an inappropriate risk to me (OFT 18(b) 18.2.1 and 12.3). The price variation clause would therefore be unenforceable.
- Pay increases to its staff,
- Cost increases associated with leases
- Maintenance costs
- Call termination charges - which are fixed and agreed and published in advance by Ofcom and have decreased substantially over the years.
- Cost of the "spectrum" was incurred in April 2000 and therefore not subject to any cost increase.
- The cost of the handset - which was incurred before the contract started and therefore cannot be subject to inflation
- Utility charges
- Page 6 of 8
PLEASE NOTE THIS HAS BEEN UPDATED - SEE THE CISAS CASE ON THE FIGHT MOBILE INCREASES WEBSITE - IT IS AVAILABLE AS A WORD DOCUMENT AND AS A SPREADSHEET - THE SPREADSHEET IS MUCH EAISER TO USE.
https://fightmobileincreases.com/figh...gn-against-ee/
Appendix 2 - Penalty Free cancellation following a change in T&Cs
NOTICE period:
Please note that my claim is under GC 9.6, the UTCCRs and the contract terms therefore any time limit for action is not determined by the contract but by GC9.6, and the UTCCRs Under GC 9.6 there is no claim time limit imposed on me. GC 9.6 only places a minimum time restriction on EE to provide me notice there is no time limit expressed or implied on when I need to take action. As GC 9.6 is a rule for the industry to follow - not the consumer - it is akin to the UTCCRs and other legal guidance where the time limit for action is six years and not 30 days. Should EE argue that this claim is "out of time" then I put EE to strict evidence to prove where GC 9.6 places a 30 day time restriction upon me.
In any case the notification sent of the change in T&Cs breached the CPRs in that EE had not applied the necessary Professional Diligence by failing to realise that under GC 9.6 they should have advised me of my right to a penalty free cancelation AND the wording of the text was such that it was misleading causing material distortion preventing me (at the time "an average consumer") from making an informed decision. The notification was deficient in two respects and cannot be construed as adequate notice as required under GC 9.6 nor under the principle of acting in Good Faith as required by the UTCCRs and I believe also breaches the CPRs (misleading - material distortion). Therefore I request that any time limit for taking action is set aside due to these deficiencies, otherwise EE may be allowed to circumvent its liabilities to me simply by employing a misleading approach giving rise to a material distortion or failing to apply the required standard of duty of care (professional diligence) to the change notification.
Notification Deficiency 1 - Notice was not as prescribed under GC 9.6, and Breaches CPR Regulation 2 and 3
Under GC 9.6 (c) a notification of a change which is LIKELY to be of material detriment to me must be accompanied with an explanation that I may be able to cancel my contract without penalty:
Ofcom GC 9.6 c) "at the same time as giving the notice in condition 9.6(a) above, shall inform the Subscriber of its ability to terminate the contract if the proposed modification is not acceptable to the Subscriber."
As I intend to prove below the change was likely to be of Material Detriment to me as: - It allows EE to impose a higher price increase than was previously the case, and
- It narrows the grounds on which I can seek a penalty free cancellation when the price variation clause is used.
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https://fightmobileincreases.com/figh...gn-against-ee/
Details
Right to a Penalty Free Cancellation under the UTCCRs
My claim is that the change of T&Cs is unfair under Schedule 2 Paragraph 1 (K) of the UTCCRS and as such triggers my right to a penalty free cancellation.
The change in T&Cs allows EE to apply a higher price rise than was previously the case, and reduces the scope that I have to cancel my contract penalty free should EE increase the contract price.
The Change T&Cs is as follows:
TM and EE
7.2.3.2. The change that We gave You Written Notice of in point 7.1.4 is: (i) an increase in Price Plan Charge (as a percentage) higher than any increase in the retail price index (also calculated as a percentage) or any other statistical measure of inflation published by any government body authorised to publish measures of inflation from time to time, and published on a date as close as reasonably possible before the date on which We send You Written Notice;
Orange
4.3.1 we give you written notice to increase the Charges (as a percentage) by an amount equal to or less than the percentage increase in the All Items Index of Retail Prices or any other statistical measure of inflation published by any government body authorised to publish measures of inflation from time to time, and published on a date as close as reasonably possible before the date on which we send you written notice;
Whereas the new clause is
EE & T-Mobile
7.2.3.3. We have given You Written Notice of an increase in a Price Plan Charge under point 7.1.4 and (i) the increase in Your Price Plan Charge (as a percentage) is higher than the annual percentage increase in the Retail Price Index (RPI) published by the Office for National Statistics (calculated using the most recently published RPI figure before we give you Written Notice under 7.1.4);
ORANGE
4.3.1 the increase in the Charges (as a percentage) is equal to or lower than the annual percentage increase in the Retail Price Index (RPI) published by the Office for National Statistics (calculated using the most recently published RPI figure before we give you Written Notice under 4.3).
It is clear from the above that the maximum amount that EE can reference to increase my contract by has increased from the lowest inflation rate published to the published RPI. Therefore the absolute amount of the increase can now be higher than was previously the case which is not allowed under the UTCCRs. Indeed EE demonstrated this in May 2014 when they applied an RPI increase to my account at the rate of 2.7% when under the old contract clause they would have only been able to apply an increase of 1.7% - a difference of 58.8%.
Any change in the contract that allows EE to apply a higher price rise than was previously the case would, under UTCCRS Schedule 2 Paragraph1 (K), give rise to my right to a penalty free cancellation:
10.1 A right for one party to alter the terms of the contract after it has been agreed, regardless of the consent of the other party, is under strong suspicion of unfairness. A contract can be considered balanced only if both parties are bound by their obligations as agreed.
10.2 If a term could be used to force the consumer to accept increased costs or penalties, new requirements, or reduced benefits, it is likely to be considered unfair whether or not it is meant to be used in that way. A variation clause can upset the legal balance of the contract even though it was intended solely to facilitate minor adjustments, if its wording means it could be used to impose more substantial changes. This applies to terms giving the supplier the right to make corrections to contracts at its discretion and without liability.
10.3 (c) there is a duty on the supplier to give notice of any variation, and a right for the consumer to cancel before being affected by it, without penalty or otherwise being worse off for having entered the contract
Further or in the Alternative
Right to a Penalty Free Cancellation under GC 9.6. - Higher price rise allowed
My claim is that the change of T&Cs is likely to be of Material Detriment to me under GC 9.6 and therefore triggers my right to a penalty free cancellation.
The change in T&Cs is to my Material Detriment as it both allows EE to apply a higher price rise than was previously the case, and reduces the scope that I have to cancel my contract penalty free should EE increase the contract price.
The phrase "likely to be of Material Detriment" (note it only has to be "likely" - not definite) was introduced in GC 9.6 which itself does not explicitly define Material Detriment, however the meaning can be deduced by considering: - The intention behind Ofcom (and OFTEL before them) introducing the term "likely to be of material detriment" into GC9.6 and
- By reference to the source documentation for GC 9.6 which is the USD 20/(22).
1 - OFTEL/Ofcom intentions of introducing the phrase "likely to be of Material Detriment": - Page 8 of 8
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https://fightmobileincreases.com/figh...gn-against-ee/
Further or in the Alternative
Right to a Penalty Free Cancellation under GC 9.6. - Restricted Cancellation rights
I believe EE made the change to T&Cs with reference to Ofcom guidance in which CPs were asked to ensure that any price variation clauses were written in such a way as to ensure that they comply with the UTCCRs and therefore move from being unenforceable to enforceable, Clearly any change in T&Cs that moves me from a position whereby EE have an unenforceable price variation clause to a position where EE can now enforce the clause has to be to my Material Detriment. This position is supported by the very language that EE have used when explaining how this change "benefits me" i.e. "…certainty and transparency…" which is the language of the UTCCRs.
The relevant Ofcom regulations are below with a link to the full document, but note that this is not a change that is a legal requirement and EE were not, and are not legally obliged to change T&Cs in existing fixed term contracts by this guidance. It is Paragraph 4, which I have highlighted, which is most relevant.
https://stakeholders.ofcom.org.uk/binaries/consultations/addcharges/stat...
This is industry guidance on unfair terms in contracts for communications services. It focuses principally on additional charges in consumer contracts, also referring to the obligation for communications providers to comply with General Condition 9 (contract terms)
Guidance on unfair terms in contracts for communications services
Introduction
1. Standard form terms in contracts for the supply of goods and services in the UK, between sellers or suppliers and consumers, must comply with the Unfair Terms in Consumer Contracts Regulations 1999 ("the Regulations"). The OFT, together with a number of other bodies including Ofcom, share the task of enforcement. As a qualifying body, Ofcom has certain duties to consider complaints about terms in contracts used by communications providers ("CPs")
2. The OFT has published general unfair contract terms guidance, based on its experience of enforcing the Regulations, which addresses a wide range of terms in consumer contracts. ………
3. Ofcom believes that sector-specific guidance (this "Guidance") on a limited range of such issues will benefit CPs and consumers. This Guidance focuses principally on contract terms which provide for the payment by the consumer of additional charges, default charges, minimum contract periods and notice periods, and contract terms which may lead to additional charges being incurred.
While in many cases this is helpful in considering terms in consumer contracts within communications markets, it does not directly address some of the common terms in contracts for communications services.
4. Ofcom expects CPs to review their terms in light of the Guidance and to amend or remove any that are unfair. Unfair terms are not legally enforceable against consumers (see Regulation 8(1)), so it is in CPs' interests, as well as consumers,' to ensure that terms are fair.
Further EE have tried to tell me that this change in T&Cs is for my benefit as it makes my contract clearer. If EEs motive is truly to make the contract clearer then EE would have taken the opportunity to remove the phrase "material detriment" from their contract terms as this is the most ambiguous part of the whole contract. By not rectifying this, but only seeking to ensure that the price variation clause is clear (and therefore more likely to be enforceable) and references the highest inflation rate, I believe highlights the real motive for the change to T&Cs which is not to make the contract clearer for my benefit, but rather to give EE a price variation clause which is more likely to be enforceable, and gives EE the right to apply a higher price increase and therefore the change is clearly to my Material Detriment. This again demonstrates a breach of the CPRs in both the lack of professional diligence EE have applied, and using misleading information that gives rise to a material distortion, as it altered my decision on whether or not to seek a penalty free cancellation.
General prohibition
10.2 The general prohibition is made up of two tests. It prohibits practices that:
• contravene the requirements of professional diligence
and
• materially distort the economic behaviour of the average consumer with regard to the product (or are likely to).
Test 1: Professional diligence
10.4 Professional diligence is defined (in Regulation 2) as:
'the standard of special skill and care which a trader may reasonably be expected to exercise towards consumers which is commensurate with either - (a) honest market practice in the trader's field of activity, or (b) the general
principle of good faith in the trader's field of activity'.
Test 2: Material distortion
10.8 Material distortion is defined (in Regulation 2) as:
'appreciably to impair the average consumer's ability to make an informed decision thereby causing him to take a transactional decision that he would not have taken otherwise'. It applies either when a practice distorts or is likely to distort the average consumer's behaviour.
The second condition is likely to be met if, for example, because of the practice, the average consumer would buy a product they would not otherwise have bought, or would not exercise cancellation rights when otherwise they would have done so.
Misleading and aggressive practices
3.5 Regulations 5-7 of the CPRs prohibit commercial practices which are misleading (whether by action or omission) or aggressive, and which cause or are likely to cause the average consumer to take a different decision.
OVERALL
In summary the change in T&Cs gives rise to my right to a penalty free cancellation as it purports to allow EE to impose a higher price rise (RPI) than was previously the case (CPI) and at the same time narrows my scope for seeking a penalty free cancellation should EE impose a price rise.
Through EE not applying the Professional Diligence required under the CPRs (in not notifying me of my right to a penalty free cancellation when the T&Cs were changed as per GC 9.6) AND by using misleading wording in the change notification text EE have materially distorted the way the effects of the change in T&Cs were presented to me which has caused me to exercise my cancellation rights at a much later time than would have been case. - PLEASE BE AWARE OF THE BELOW. This is a Gross breach of contract AND breaks the unsolicited goods and services act. Include it in your CISAS case if this happens to you.
If in your communication with EE you at any point get a message from the Executive office, with words to the effect of:
To prevent you contacting our Customer Services Team, I have taken the opportunity to provide your PAC below for both of your numbers.
No: 07xxxxxxxxx & 07xxxxxxxxx
PAC: Oxxxxxxx
Expiration Date: 07/09/2014
As advised, should you use the PAC provided above, early termination charges will be applied to your following bill.
CALL EE IMMEDIATELY - I got this on a few days ago (9th August), emailed them to say I would not be using it (i made it very clear in my email) but didn't have a chance to call.
Today i have had my account suspended for exceeding my credit limit (there isn't a chance with EE my data is capped at 2gig and i get reminders, any everything else is unlimited) and are holding me to a Ј220 ransom to get my account unlocked
Step 2
Step 3
If you lose than you have lost a little of your time sending some emails, but you would have also learned a little about consumer law - and will see for yourself how weak and ineffectual Ofcom is. But more importantly you can feel happy that by taking EE to CISAS you have cost them around Ј300 – which is more than they were ever going to get off of you on their price rises!
If you win you will be a few quid better off than you were before (better the money is in your pocket than the Mobile companies fat cat directors bonus)! But more than that you would have come away feeling the elation of hitting back at EE who so smugly told you that you could not escape the price increase and that it is “only equivalent to the cost of a can of beans”.
And if you think that it is not worth fighting for relatively small sums of money then remember that the 2013 price increase for EE is estimated to be worth Ј52,000,000 (yes Ј52 MILLION). So if you don't need/want the money then when you win donate it to a local children's hospice or some other worthy cause because they need it more than phone companies!
Here is my suggestion: https://www.havenhouse.org.uk/
And if you are also in the position of cancelling a contact then you will be saving a good sum of cash each month by switching to a SIM only deal
USE THE FOLLOWING IF YOU PURCHASED DIRECT FROM EE ON THE PHONE
When entering into my contract via a call to the EE sales centre I was informed that there were T&Cs attached to my contract, however I was NOT informed that those T&Cs contained a price variation clause as required under the UTCCRs to ensure that the clause was clearly and adequately drawn to my attention. If EE should argue otherwise then I put EE to strict proof, by the provision of a recording of the sales call that the clause was clearly and adequately drawn to my attention.
USE THE FOLLOWING IF YOU PURCHASED IN STORE
The sales person never made clear to me that the contract contained a price variation clause, nor does the face of the contract clearly highlight that it contains a price variation clause.
I therefore entered into the contract with the legitimate expectation that the price was fixed for the term of the contract.Therefore the manner in which the contract was entered into did not satisfy the UTCCRs requirement that EE should have "clearly and adequately" drawn the price variation clause to my attention and should be deemed unfair and unenforceable
Further Evidence that the price variation clause was not "Clearly and adequately" drawn to my attention can be found in the Welcome letter which EE sent to me. This document clearly summarises the main parts of my contract and clearly shows the monthly price and the number of months - there is no mention that the price can be changed.
Additionally Olaf Swantee (Chief Executive of EE) has in an open letter to "Which" concerning price increases in fixed term contracts (Dated 9th July 2014) stated:
"….Following Which's Fixed Means Fixed campaign, we've introduced, changes and are now providing new customers with improved choice and transparency in all our pay monthly plan pricing.
'We now explain when customers sign up or renew their contract that the price of our pay monthly plans will increase once a year in line with inflation"
https://www.which.co.uk/campaigns/mobile-phone-price-rises/ee-olaf-swant...
It is clear from the above that EEs own Chief Executive recognises that EE have changed its methods so that there is now "transparency" and that they "now explain" that prices will increase. This is clear evidence from the very top of EE that previously this was not the case.
I put EE to strict evidence to prove that I was informed that the contract contained a price variation clause at the time my contract was taken out. If EE disputes my claim that its advertising at the time did not contain clear guidance that the price was variable, then I put EE to strict evidence by provision of such adverts which were being used when I entered into my contract.
I also ask the adjudicator to consider the name of the price plan that I was contracted to - "Panther 26", the name of the plan corresponds with the (initial) monthly contract price and is further evidence that I genuinely believed I was signing up to a fixed term contract at a fixed price and is further evidence that the contract does not meet the "clearly and adequately" fairness test
The adjudicator should consider Ofcom GC 23.2 in relation to the plan name:
Mis-selling prohibition
23.2 When selling or marketing Mobile Telephony Services, the Mobile Service Provider must not:
(a) engage in dishonest, misleading or deceptive conduct;
I believe EE linking the plan name to the initial monthly cost falls foul of the Ofcom GC 23.2 (a) in that if the price is not fixed then the name is misleading and deceptive and is part of the reason as to why I believe a degree of compensation should be considered by the adjudicator.
Further under the CPRs (Regs 5 & 6) paragraphs 7.6 and 7.7 state:
Misleading information generally
7.6 These are actions that mislead by:
• containing false information OR deceiving or being likely to deceive the average consumer (even if the information they contain is factually correct), and
• the false information, or deception, relates to one or more pieces of information in a (wide-ranging) list - which includes at paragraph 7.7 (g) "the price or…."
and
• the average consumer takes, or is likely to take, a different decision as a result.
For the reasons above the clause fails the level and timing of any price increases are specified (within narrow limits if not precisely) test and therefore should be ruled as unfair and unenforceable.
I believe that EE effectively admitted this deficiency in its price variation clause as one of the explanations offered by EE as the reason for changing its' T&Cs was:
"Why have you changed the terms?
We've clarified our terms to offer customers more certainty and transparency in the event of us making any changes to your price plan charge. "
Further the EE legal department used in their CISAS defence in cases regarding changes in T&Cs the following (I put EE to strict proof that they did not say this should they claim such)
"31. On the contrary, the effect of the changes is to benefit the Claimant. The
changes make clear and certain the specific published measure of inflation
which may be used for the purposes of this comparison. Out of date and
potentially confusing references to other statistical measures of inflation have been removed. The changes therefore will enable the Claimant to identify when a right of cancellation arises.
35.2. As noted above the proper construction of the Old Term may not be
easy to establish. It does not make clear which statistical measures of
inflation may be used for the purposes of comparison.
So it is clear from the above that the EE legal team realise that the clause used in previous price rises is not defined "narrowly if not precisely", and as a clause that is not clear and certain and specific (by EEs legal teams own admission) it is by definition not "narrowly nor precisely defined" and should be ruled as unfair and therefore unenforceable.
Further or in the alternative
The price variation is discretionary (capped by RPI, but not linked to anything at all)
UTCCRs Schedule 2 Paragraph 1 (L)
OFT rules say that a price variation cannot be discretionary:
12.2 Any purely discretionary right to set or vary a price after the consumer has become bound to pay is obviously objectionable. That applies particularly to terms allowing the supplier to charge a price on delivery of goods that is not what was quoted to the consumer when the order was placed. It also applies to rights to increase payments under continuing contracts where consumers are 'captive' - that is, they have no penalty-free right to cancel.
UTCCRs Schedule 2 Paragraph 1 (J)
OFT rules say that variation clauses cannot be used to suit the interests of the supplier.
10.3 (b) it can be exercised only for reasons stated in the contract which are clear and specific enough to ensure the power to vary cannot be used at will to suit the interests of the supplier, or unexpectedly to consumers
The EE price variation clause makes no reference to the circumstances that may give rise to EE increasing its charges, it merely states that EE can increase its charges - it is therefore discretionary. I put EE to strict evidence to show where in the contract the grounds/reasons for applying a price increase are explained.
Whilst the contract states charges can be increased there is no reference as to the grounds on which charges can be increased, hence why it is a discretionary price increase. The fact that EE places a vague limit on the price variation (RPI or any other statistical measure of inflation) does not indicate that EE can only increase prices if EE's costs increase. There is a World of difference between:
Therefore EE has attempted to give itself a discretionary price variation clause to allow it to suit its own interests by applying an increase to the contract price (RPI) to a "captive consumer" that needs not bear any relation to increases in EE's costs of carrying out our contract. Therefore the clause should be held to be unfair and unenforceable.
Further evidence that the price variation clause is NOT linked to EEs costs increases can be found in EEs response to my email. In that email EE state:
"….we are committed to investing significantly in our network …."
It therefore suggests that the price rise is to fund investment as well as to cover cost increases, the UTCCRs do allow companies to raise funds for investment from consumers who are "trapped" in their contracts -price increases MAY be fair in very limited circumstances..
Additionally EE state
"…Our Terms and Conditions give us the right to increase the cost of our services… "
So again demonstrates that there is no reason/grounds stated in the contract for doing so, other than to suit EEs profit line.
Therefore it is highly unlikely that EE's costs have increased by RPI over and above any inflation initially factored into my contract price then there are no grounds (other than a profit motive) for EE to increase the price of my contract and therefore the clause should be held to be unfair and unenforceable.
Additionally further evidence that the price increase is not linked to EEs actual cost increases can be found EEs response to my email. In that email EE state:
"….we are committed to investing significantly in our network …."
Investing in the network has nothing to do with maintaining the network and running my contract.
As an RPI price increase cannot possibly be a reasonable reflection of the actual costs increases incurred in running my contract it cannot have been used for the purposes stated in the contract (notwithstanding the fact that there are no reasons given in the contract - that is why it is discretionary) should be deemed as unfair and unenforceable,
Further or in the alternative
The price rise has not been used for the purposes stated in the letter.
The price rise letter attempts to explain that the price rise is "Due to Inflation", as follows:
"Why are you increasing your prices? - Due to inflation, which DIRECTLY IMPACTS the costs of running our business we've had to re-evaluate out prices and introduce an increase….."
And
"Where did this increase come from? - We've used the RPI which …. is a measure of the increase in prices for consumers and businesses on average across the country over the last 12 months"
I believe that the use of RPI is flawed statistic in its use in this contract and is not a suitable proxy of EE's costs as the price rise letter states. The RPI is based on a basket of goods which has little - if anything - to do with the costs incurred by EE as it includes:
Therefore I do not believe that RPI is a relevant statistic as per UTCCRs Schedule 2 Paragraph 1 (L) -OFT guidance 12.4 which states that a term may be fair if:
• Terms which permit increases linked to a relevant published price index such as the RPI are likely to be acceptable
The guidance cites RPI as an example -it does not say that RPI is a relevant statistic in all cases. In this case the ONS provides Service Provider Price Indices for specific industries including Telecommunications; this would have been a better approximation of EE's costs. This statistic is published by the ONS and the relevant indices show that telecommunications costs have DECREASED since Quarter 2 of 2009:
Services Producer Price Indices, Quarter 1 2013 ONS published 22nd May 2013
Business telecommunications
Annual rate -0.4 %, up from -8.9% last quarter. Last higher in quarter 2 2009 (0.7%). Quarterly rate 0.0%, up from -2.3% last quarter. Last higher in quarter 2 2012 (2.1%).
As most indicators (including EE's own accounts) suggests that operating costs for EE have decreased over the years then there is no basis for EE to claim that the basis of the price increase is due to inflation that "DIRECTLY IMPACTS" on its costs. Therefore the price rise should be declared unfair and unenforceable as it is not being applied for the reason stated in the price rise letter (and of course there is no reason stated in the contract - as this is a discretionary - and hence unfair clause).
In a short term contract either:
In our short term contract drawn up by EE (an experienced market player -with the majority market share) in a mature market, in a stable economy EE should have factored inflationary pressures into the initial price of our contract. If EE has then there is no basis for a midterm price increase, and if it has not then it has failed in its duty of care, but either way the price variation fails the test of fairness under the UTCCRs.
As far as I can tell EE are better placed than I am to control and anticipate likely costs increase in its business over a 24 month period. EE can control/anticipate:
EE statements to Ofcom:
In the Ofcom publication "Decision to issue Guidance on General Condition 9.6
Non-confidential version" Publication date: 23 October 2013, EE are quoted at paragraph 4.56 as follows:
4.56 EE agreed that operators are able to forecast a number of cost categories related to their own network and operations reasonably accurately. However, it said CPs are also subject to price increases and, in particular, energy costs, costs of sites, rent for its retail shops and commercial rates have all gone up significantly over the past year (and some of these costs had risen faster than RPI). EE said that operators should be able to pass on to customers any costs or revenues that they are unable to accurately plan e.g. regulatory decrease of certain revenue streams such as wholesale mobile termination rates.
Clearly the UTCCRs do allow the recovery of lost revenues, only cost increases (in limited circumstances), and as EE have clearly stated that they are able to anticipate a number of cost categories in my contract, then they have either been negligent in not so doing, or are double counting inflation associated with those elements where EE have already factored in inflation. Even shop rents/ energy prices EE should be capable of making an informed estimate of likely increases, or mitigating risks by hedging energy costs or negotiating better lease terms/looking for different premises for example.
Given the above two scenarios above (Operating environment and EEs statements to Ofcom) I am at a loss as to what cost increases EE never anticipated when setting the initial contract price? As EE appear to have failed in their duty of care, and not applied the Professional Diligence expected (CPRs) when setting the initial price they cannot transfer the risk to me and therefore the price rise should be held to be unfair and unenforceable.
Without prejudice
EE have breached the principles of Good faith
Under the UTCCRs a term is unfair (and therefore unenforceable)
A standard term is unfair 'if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer'- Regulation 5(1). Unfair terms are not enforceable against the consumer.
The requirement of 'good' faith embodies a general 'principle of fair and open dealing'.1It means that terms should be expressed fully, clearly and legibly and that terms that might disadvantage the consumer should be given appropriate prominence - see below. However transparency is not enough on its own, as good faith relates to the substance of terms as well as the way they are expressed and used. It requires a supplier not to take advantage of consumers' weaker bargaining position, or lack of experience, in deciding what their rights and obligations shall be. Contracts should be drawn up in a way that respects consumers' legitimate interests.
Given the arguments above I believe that the contract does not meet the requirements of good faith, and is therefore unfair and unenforceable.
Additionally EE rely on the provisions of GC 9.6 as a source of power to give it the right to increase prices. However EE would be aware that GC 9.6 is supposed to be the embodiment of Universal Service Directive (USD) into UK law which allows consumers to exit their contracts without penalty if any modifications to the terms are made. By not having due regard to the source and ultimate meaning of GC 9.6 EE has relied on my ignorance (at the time) of the protection offered to me under the USD and this goes against the principle of acting in Good Faith.
Directive 2002/22/EC of the European Parliament and of the Council
7th March 2002
Chapter IV - End User Agreements
Article 20 - Contracts
Paragraph 4
4. Subscribers shall have a right to withdraw from their contracts without penalty upon notice of proposed modifications in the contractual conditions. Subscribers shall be given adequate notice, not shorter than one month, ahead of any such modifications and shall be informed at the same time of their right to withdraw, without penalty, from such contracts, if they do not accept the new conditions.
As a multinational company with over 20 years' experience of operating under UK OFTEL/OFCOM regulation EEs legal department should have known that the effect of the change in contract terms was as stated above, and therefore was likely to be of Material Detriment to me. It is not sufficient for EE to plead that at the time of notification they believed that the change was not likely to have been of material detriment as had EE applied the Professional Diligence required EE would have known (CPR 10.2 and 10.4 (a) & (b)) that this was the effect and cannot be allowed to circumvent its obligation through ignorance/wilful negligence:
General prohibition
10.2 The general prohibition is made up of two tests. It prohibits practices that:
• contravene the requirements of professional diligence
and
• materially distort the economic behaviour of the average consumer with regard to the product (or are likely to).
10.3 The first test is concerned with the conduct itself - that is the standards of the trader's practice. The second is concerned with the actual or likely effect the practice has on the average consumer's economic behaviour.
Test 1: Professional diligence
10.4 Professional diligence is defined (in Regulation 2) as:
'the standard of special skill and care which a trader may reasonably be expected to exercise towards consumers which is commensurate with either - (a) honest market practice in the trader's field of activity, or (b) the general principle of good faith in the trader's field of activity'.
Notification deficiency 2 - The text wording is misleading - breaching CPR regulations 3, and 5-7.
EE notified me of the change in T&Cs by Text as follows:
For T-Mobile and Orange
We're making some changes to the terms and conditions for your T-Mobile plan regarding the notification of price changes. The new terms will take effect from 26 March 2014.
For 4G EE
We're making some changes to the terms and conditions for your 4GEE plan to give you more clarity on the notification of price changes. For more details and to download a copy please see https://www.ee.co.uk/termsrefreshv1 The new terms will take effect from 26 March 2014.
and had a link to EEs website.
As can be seen there is no mention that the change allows EE to apply a higher price rise than was previously the case, but merely appears to be about the way in which changes are notified (format/timing) -" ….regarding the notification of price changes…"
Had EE acted with the required standard of Good Faith, with transparency, and complied with the CPRs they would have clearly stated that they had modified which inflation rate will be referenced in the price variation clause. Modification of the inflation rate to be used is totally different to the modification of the "notification" of a price change. As far as I can tell the changes applied neither effects the timing or method of notification. The use of misleading wording in the text notification was a material distortion and changed my decision as I would have requested a penalty free cancellation had EE made the TRUE meaning of the change transparent in their text.
Under the CPRs
3 General prohibition
3.3 Regulation 3 contains a general prohibition of unfair commercial practices.
3.4 A commercial practice is unfair if:
• it is not professionally diligent, and
• it materially distorts, or is likely to materially distort, the economic behaviour of the average consumer. Essentially, for the general prohibition to apply, the trader's practice must be unacceptable when measured against an objective standard and must also have (or be likely to have) an effect on the economic behaviour of the average consumer.
The second condition is likely to be met if, for example, because of the practice, the average consumer would buy a product they would not otherwise have bought, or would not exercise cancellation rights when otherwise they would have done so.
Misleading and aggressive practices
3.5 Regulations 5-7 of the CPRs prohibit commercial practices which are misleading (whether by action or omission) or aggressive, and which cause or are likely to cause the average consumer to take a different decision.
As EE have not been professionally diligent in that they have not stated that the change in T&Cs gives them a right to apply a higher price increase than was previously the case, this has caused me (at the time an average consumer) not to exercise my cancellation rights at an earlier stage and so EE have breached the CPRs
I do not know if GC 23.2 applies to notifications of T&C changes:
: Mis-selling prohibition
23.2 When selling or marketing Mobile Telephony Services, the Mobile Service Provider must not:
(a) engage in dishonest, misleading or deceptive conduct;
But I believe the text notification would not pass a test under GC 23.2.
I am also not sure if UTCCRs Schedule 2 paragraph1 (L) relate to notifications in price variation clauses, but the difference between the two clauses was not clearly and adequately drawn to my attention:
12.4 A degree of flexibility in pricing may be achieved fairly in the following ways
•…….. provided the details are clearly and adequately drawn to the consumer's attention.
Given the above EE should not be allowed to avoid its obligations to me by using misleading wording which completely ignores the true substance of the T&C change.
Additionally under the UTCCRs Schedule 2 paragraph 1 (K) and OFT guidance at 10.3 (c) I have a right to cancel my contract without penalty:
10.3 (c) there is a duty on the supplier to give notice of any variation, and a right for the consumer to cancel before being affected by it, without penalty or otherwise being worse off for having entered the contract
Further evidence of EEs misleading behaviour is that by following the link you are taken to the new price variation clause, there is no comparison with the old clause, nor even a link to the old clause. On a casual reading without the original price variation to reference the true implication that EE are allowing themselves to impose a higher price rise is not evident.
In the Ofcom publication "Price rises in fixed term contracts" published on 23rd October 2013 at Paragraph 3.6 Ofcom explain the reasons for including a Material detriment test:
3.6 Our intention was to reflect our general duties and principles of good administration and proportionality in particular. We sought, in light of these, not to rule out contract variations altogether. For example, those beneficial to, or having a neutral impact on, a subscriber.
As Ofcom's reasoning for introducing the term was to protect me - the consumer - from changes in the T&Cs which are not to my benefit or at the very least neutral, then any other change is LIKELY to be of Material Detriment. As the updated T&C allows EE to apply a higher price variation to my account then it clearly cannot be either to my benefit or neutral in its impact. Therefore under GC 9.6 I have a right to a penalty free cancellation, and EE ought to have known this (had they applied the expected level of Professional Diligence) at the time of the notification and should have informed me of my right to a penalty free cancellation, and therefore have breached the CPRs with regards to both Processional diligence, and misleading me by omission (CPR regulations 2,3 5-7)
Test 1: Professional diligence
10.4 Professional diligence is defined (in Regulation 2) as:
'the standard of special skill and care which a trader may reasonably be expected to exercise towards consumers which is commensurate with either - (a) honest market practice in the trader's field of activity, or (b) the general principle of good faith in the trader's field of activity'.
Test 2: Material distortion
10.8 Material distortion is defined (in Regulation 2) as:
'appreciably to impair the average consumer's ability to make an informed decision thereby causing him to take a transactional decision that he would not have taken otherwise'. It applies either when a practice distorts or is likely to distort the average consumer's behaviour.
The second condition is likely to be met if, for example, because of the practice, the average consumer would buy a product they would not otherwise have bought, or would not exercise cancellation rights when otherwise they would have done so.
Misleading and aggressive practices
3.5 Regulations 5-7 of the CPRs prohibit commercial practices which are misleading (whether by action or omission) or aggressive, and which cause or are likely to cause the average consumer to take a different decision.
2- Reference to the Source Documentation (USD 20/22)
It is clear that the intention of USD 20(22) was to give the CONSUMER the choice to cancel their contract during a fixed period for ANY modification that is made which they do not accept. It therefore follows that the threshold for "material detriment" must be a low threshold, and that view is supported by the Ofcom statement (above) in regards to the intention behind including the phrase "likely to be of material Detriment" i.e. not to my benefit or neutral in its impact.
This is the definition that should be applied as it complies with the approach to be taken under the UTCCRs Schedule 2 Paragraph 1 (K), and the full meaning of USD 20(22) for which GC 9.6 is the UK enactment.
USD 2002/22/EC
Chapter IV - End User Agreements
Article 20 - Contracts
Paragraph 4
4. Subscribers shall have a right to withdraw from their contracts without penalty upon notice of proposed modifications in the contractual conditions. Subscribers shall be given adequate notice, not shorter than one month, ahead of any such modifications and shall be informed at the same time of their right to withdraw, without penalty, from such contracts, if they do not accept the new conditions.
CPI and RPI rates over the six month period Aug 2013 to Feb 2014 are as follows and can be verified from the Office of National Statistics (ONS) website, the change in designation of RPI can also be verified on the ONS website
Aug 2013 CPI 2.7%; RPI 3.3%
Sep 2013 CPI 2.7%; RPI 3.2%
Oct 2013 CPI 2.2%; RPI 2.6%
Nov 2013 CPI 2.1%; RPI 2.6%
Dec 2013 CPI 2.0%; RPI 2.7%
Jan 2014 CPI 1.9%; RPI 2.8%
Feb 2014 CPI 1.7%; RPI 2.7% (58.8% higher)
https://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/february-2013/...
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