Mikaela* was pretty happy with her monthly phone plan until she received a call from her provider selling her the benefits of a new, more expensive one. Mikaela agreed to change and tried out some of the different features. She then decided to switch back to her original plan. Mikaela found the salesperson had over-sold the benefits of the new plan and was also surprised when her first monthly bill was higher than expected.
The provider refused Mikaela’s request to return to her original plan, enforcing the minimum term period of the new contract. This further frustrated Mikaela as she believed the salesperson had misrepresented her ability to change back to the original plan if she was dissatisfied.
Mikaela contacted TDR to claim that the phone provider had misled her, breached its contractual obligations and was being unreasonable.
Next steps
The phone provider was not willing to engage in mediation, so TDR appointed an adjudicator to make an independent decision on the matter.
The provider pointed to their terms of service, which were available online, and stated that they allowed them to refuse to reinstate Mikaela’s original plan and to enforce the minimum term. There was no signed, physical documentation of any aspect of the transaction and phone recordings were not available.
While the terms and conditions did include those clauses, other obligations also applied. TDR’s adjudicator considered the law and the TDR Terms of Reference. They considered the effect of the Fair Trading Act 1986 which requires that traders not use misleading or deceptive conduct with consumers as well as the Consumer Guarantees Act 1993 which requires that services, including telecommunications services, are supplied with reasonable care and skill. TDR considered fairness in all of the circumstances. In addition, the basic principles of contract law also applied and this impacted the customer’s ability to go back to the original plan and her obligation to remain in and pay for the new plan.
Outcome
Balancing all of the above with the particular facts of the case, TDR concluded that the customer had been sufficiently advised of the terms of the new plan and that there was insufficient evidence of the alleged misleading conduct.
Lessons learned
While the customer’s complaint was not upheld, this case still provides important learnings for providers and consumers. Any business practices that are based on oral calls and conversations can mean there is little or no evidence down the track if needed to support or defend a dispute. Thought must be given to how the terms and conditions are bought to the customer’s attention adequately in order to rely on the legal rights and responsibilities set out in those terms and conditions. Providers must also remember that the terms of a contract are not the only determinant of whether those terms are enforceable.
* Names and identifying details have been changed or removed