Saturday, 10 May 2014

Has The Initial Term Of Your #Mobile Contract Expired?

Are you a cash cow?
Today I contacted Vodafone to cancel the 3G contract I took out as part of an iPad offer a few years back. It's included as an extra number on my mobile bill, so it was easy to kind of forget it in the total. Turns out I'd diarised the wrong cancellation date, and could've cancelled last October, when I was first 'out of contract'. Okay, so I'm a bit of a mug (worse, I'd long ago switched the iPad to 'airplane' mode, so wasn't even using the 3G option), but I do tend to have a lot more important things on my mind. The decent thing would have been to remind me at the time the intial term expired to give me a chance to consider if I wanted to extend, switch or cancel. But that's not part of the service...

The first customer service person I spoke to wasn't allowed to process my cancellation request. She had to put me through to another person who could. I protested, but to no avail. Needless to say, the next person began putting me through the whole process again, presumably so I'd lose the will to cancel and consider an upgrade.

I toughed it out and insisted on cancellation. The representative agreed to put that through, but said it would only take effect in 30 days' time. Hang on, I said. If it was true that I was "out of contract", as they kept saying I was, then how could Vodafone still be entitled to 30 days of my money - not to mention the extra 6 months they'd already enjoyed through my diary error? I knew the answer, but I wanted to hear the explanation.

You see, they didn't really mean that I was 'out of contract' in the sense that the contract had somehow expired. That would be misleading. If the contract had really ended, Vodafone wouldn't have been entitled to be paid for the extra 6 months, never mind the 30 days. Instead, they only meant that the minimum term of the contract had expired. That meant the contract had actually continued subject to termination on 30 days' notice - so it could have gone on for 30 years if I hadn't called to cancel it. 

When I asked if Vodafone has a process for notifying customers when they are 'out of contract' (i.e. when their initial term has expired), the representative said they did not.

Of course, Vodafone does have a process of calling you about upgrade opportunities a long time in advance of when the initial term expires. But that's just marketing. They then go quiet around the time the initial term expires, so you bear the risk of beoming a rolling 30-day cash cow.

I wonder how many customers paid for an iPad or other device through a 3G contract and forget it's still appearing in their bill even though the initial term had ended? And how many get a new mobile and don't realise they're still paying for an old one they thought was 'out of contract'? Are they to be treated as stupid people, or people with a hell of a lot of other stuff on their mind who could do with a reminder? Would they be prepared to pay a small admin charge for a reminder at the right time, or should such a reminder be a part of any decent service?

It's worth noting that Ofcom banned "automatic rollover contracts" for consumers and businesses with no more than 10 employees in September 2011. But the ban only applied to landline voice and broadband services, and it only means the customer can't be automatically renewed into another extended 'minimum contract period'. The new rule is that the maximum duration of initial contracts can only be 2 years; and at that point users must be offered an option to contract for a further maximum duration of 12 months. That means they are prompted to extend, switch or cancel.

Should a similar rule be brought in for mobile services?

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