Vodafone price increase hit by cancellation terms
Last week the Independent newspaper gleefully ran a feature knocking Vodafone for "blatant dishonesty" (that was the Independent quoting someone else) after it blocked customers from cancelling contracts legimately.As many mobile phone customers know, when you sign a 12-month or an 18-month agreement with a network operator, you are tied in to paying your basic monthly fee for that whole period, even if you stop using your phone. However, when Vodafone increased call prices recently, some bright spark spotted that the more than 10% increase, in the case of some customers, meant some people would be able to cancel their contracts.
The clause (8a) the Indepent quoted says, "You may end this agreement immediately by writing to us ... if we increase call or other usage charges which have the effect of increasing your call or other usage charges by more than 10 per cent."
Vodafone had announced that its minimum call charges would be going up by 25 per cent. As well as this, calls to 0871 numbers will rise 40 per cent to 35p a minute and 0870 numbers (used by many call centres) will be up 33 per cent to 20p. I can't find this "10 per cent cancellation" clause on the Vodafone website, so I'm either looking in the wrong place or it isn't on the site, or they have changed the terms already to close the loophole after the event.
Either way, it is a lesson to us all to make sure we read our agreements carefully to ensure we understand not only what we are taking on as a liability, but also what liabilities the company is offering to us in certain circumstances.
This story prompted me to check the call charges of my own provider, T-Mobile, but I can't seem to find the UK price plans on the T-Mobile website. It's Call Charges page only talks about calls to international zones. Orange makes it easier to find the prices, and it's interesting to see the difference. If you are a Vodafone customer on a £15 per month 100 minutes free price plan, the call charges are 18p per minute to Vodafone mobiles and landlines, while the same £15 package on Orange charges 12p per minute. Call to a mobile on a different network and Vodafone charges 40p per minute while Orange charges 35p per minute.
That would indicate that you are getting better value for money on Vodafone while you stay within your 100 more expensive minutes, but as soon as you go over your free usage, you are paying much more per minute per call.
Bear in mind too that special numbers, like 0800, 0845, 09 and some 07 numbers, are not included in free price plans. Vodafone charges 25p per minute if you call an 0800 (freephone) number. Orange charges 15p per minute.
It's no surprise, with such a difference in the cost of each per minute call, and such a confusing array of price packages, Ofcom recently announced an investigation into apparent dissatisfaction among consumers.
Ofcom’s Chief Executive, Ed Richards said: “Mobile communication is now a central feature of modern life. As our flourishing mobile sector evolves, we want to help maintain strong competition and innovation alongside consumer protection. With significant market and technology developments underway, now is the right time to ask some tough questions about the future approach to regulation. We look forward to a wide ranging debate on these issues.”
If you're interested, you can read the consultation online. It closes on 6th November 2008.
4 September 2008
Independent: Vodafone customers up in arms over price rise 'trap
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