The devil's in the detail

The devil's in the detail

Hiding clauses to catch out customers in contract T&Cs should be a thing of the past, says Chris Lee, managing director of b2b independent telecommunication and IT provider CCS.

Only 16% of people fully read the Terms and Conditions before signing a contract. From both a supplier and client perspective, a water-tight and well-drawn formal pact outlining the working relationship makes good business sense, protecting valuable interests and adding a layer of security to a third party exchange. If all the terms are written down in one place, surely there is little room for misinterpretation?  

Many businesses may assume the finer details in all telecoms and IT contracts are more or less the same every time – length of contract, number of lines, the level of service you’ll receive, etc etc – and so may scan through the T&Cs in a contract rather than specifically reading each detail. Unfortunately we’ve seen many businesses caught out by common catches within these agreements, finding themselves in difficult (and expensive) situations.

Unfortunately the ICT telecommunications sector generally has a bad reputation when it comes to mis-selling, so at CCS we’re making it our aim to give our industry a much needed boost in terms of image and reputation, and are pioneering ‘ethical selling’.

While for many customer supplier business relationships ethical selling is common practice, we’re increasingly finding that in the telecoms sector, customers are becoming trapped in contracts due to hidden clauses in the T&Cs.

We asked the businesses we work with across the North East, including our customers, ‘nearly customers’, contacts, friends and family, what were the key issues they’d encountered when trying to end, cancel or leave a telecoms or ICT contract. The top five issues we found were:

1. Contract automation and rollover
2. Selling on of contracts, largely where a supplier has gone bankrupt
3. A change in circumstance triggering the start of a new minimum contract period
4. Early termination fees
5. Minimum spend clauses

While completely legal, each of the above contractual issues are an underhanded way of tying your business into a longer contract if not highlighted by the supplier at the point of signing. However, these are of course notions which spread farther than simply telecommunication services.

For domestic consumers, the process of changing or ending telecommunication contracts has been made significantly easier in recent years thanks to strict governance from Ofcom and in December 2011 it confirmed that rollover contracts would be banned.

However, Ofcom’s ruling only covers residents and small busineses with 10 or fewer employees, leaving many busineses finding it much harder to switch ICT or telecommunication services – red tape, supplier agreements, longer network contracts and even unexpected loopholes or complex jargon often make moving difficult.

Through speaking to ‘nearly clients’ – clients who would want to work with CCS but have been tied into contracts with existing providers – we’ve calculated that hidden contract clauses, such as those listed above, have cost the businesses affected an average of £15.70 per phone line (including landline and mobiles).

With an approximate 338,550 landlines in the North East alone, the cost of being tied into an unwanted contract could potentially reach over £5million. We’ve calculated this by looking at the businesses we know who have been stung and working out how many lines they need and how much money they’ve lost through either not being able to change provider when they wanted to or compulsory late fees.

Of course, the figure above is an average – some businesses we’ve been in contact with have escaped lightly while the largest financial impact we’ve seen is £60 per phone line.

We don’t feel this is fair and want to be the catalysts of change, pioneering an ethical shift in our industry. We want businesses to have the right to choose their telecoms provider with the freedom to make a clean break at the end of the contract if they wish, with no nasty surprises along the way. Customers should choose to stay with their partner rather than feeling trapped with their supplier.

If you’d like to know more about CCS’ ethical selling or to reserve a copy of the company’s forthcoming white paper on the topic, please visit www.CCSmobile.co.ukTalkingARC