3GScottishUser
4th May 2006, 09:34 AM
From the Ofcom Website:
Complainant: A member of the public
Complaint against: Hutchison 3G (UK) Ltd (3)
Case opened: 9 January 2006
Case closed: 2 May 2006
Issue: Alleged unfair contract terms
Relevant instrument: Unfair Terms in Consumer Contracts Regulations 1999 (the Regulations)
Ofcom received a complaint in relation to a term in 3's Cellular Service Standard Agreement.
Ofcom has considered the terms and conditions contained in all the documents that constitute the Cellular Service Standard Agreement (the Contract) and has now closed its investigation. In relation to all but one issue raised by Ofcom under the Regulations, 3 has amended its contract to the satisfaction of Ofcom (for details see below). In relation to one further issue concerning the font size of the terms and conditions, Ofcom has reserved its position. Ofcom will revisit this issue in the event that any evidence arises of potential or actual unfairness to the detriment of consumers.
(i) Clause 2.1 of 3's terms and conditions required consumers to agree to terms in all documents produced by 3, including those 3 might publish in future.
Ofcom regarded this term as potentially unfair under paragraph 1(i) of Schedule 2 of the Regulations (the Schedule), because the terms could irrevocably bind consumers to agreements with which they had no real opportunity of becoming acquainted. Ofcom also regarded this term as potentially unfair under paragraph 1(j) of Schedule 2 of the Regulations, because the clause could allow 3 to bind the consumer to any changes they chose to make to the terms.
3 has agreed to amend the term to:
Your agreement is made up of the Terms for 3 Services and your Price Plan, along with any other terms laid down in selected Additional 3 Services on the Handset. Additional terms may apply to any promotional or special offers.
(ii) Clause 3.6 of the Care3 Terms section of the contract, and clause 5.4 of the Terms for 3 Services explained the circumstances and process through which handsets locked to the 3 network would be unlocked.
Clause 5.4 of the terms and conditions further explained the process by which 3 would unlock handsets locked to their network: if customers wanted to have their phone unlocked, their account needed to be up to date, and the price paid for the handset would be the full retail value of the handset. If these requirements were met, 3 would then arrange for the handsets to be unlocked, for a fee.
Ofcom considered these two terms to be potentially unfair under paragraph 1 (i) of Schedule 2 of the Regulations, and paragraph 5(1) of Schedule 2 of the Regulations because they created an imbalance between 3 and consumers, by making reference to the consumer's liability to pay the full handset price, without clearly explaining the circumstances in which this would apply and how it would be implemented. The use of words such as title in the term also appeared to be potentially unfair under Regulation 7, which requires the use of plain, intelligible language.
3 has agreed to change the terms to:
Handsets which can be used to access 3 Services are locked to our network. The software in the Handset and all intellectual property rights in that software is owned by the Handset manufacturer and you are being allowed to use the software on a limited licence from the Handset manufacturer. During the term of your agreement for the supply of 3 Services, you must not permit your Handset to be unlocked via any unauthorised manner (i.e. by anyone other than us or the Handset manufacturer). You must contact us if you want your Handset to be unlocked from our network. If you contact us to request that your Handset be unlocked from our network, we will arrange for your Handset to be unlocked in an authorised manner (which may include replacing your Handset with an unlocked Handset which is the sam e or similar specification to your Handset) and you must pay an unlocking administration charge (which will be shown in the Price Guide for 3 Services). In addition, if you have had your Handset for less than 12 months, you will also have to pay the Handset Unlock Fee (this is also shown in the Price Guide for 3 Services). In addition, you must ensure that there are no outstanding amounts owing on your 3 account. Prior to us arranging for your Handset to be unlocked, you must ensure that you back-up or otherwise store separately any of your information or other data on the Handset which you may require, as this may be lost during the Handset unlocking process. We are not responsible for any information or other data which may be lost during the Handset unlocking process.
(iii) Clause 6.7 of 3's terms and conditions stated that 3 might publish an acceptable use policy providing more detail about the rules for use of certain 3 Services, that, if 3 did publish such a policy, it might amend it from time to time, and that consumers could view it on 3's website or request a copy from 3 Customer Services.
Ofcom regarded this term as potentially unfair under paragraph 1(i) of Schedule 2 of the Regulations, as it did not give consumers a reasonable opportunity of becoming acquainted with either the existence of an acceptable use policy, or any change in that policy, which forms part of their contract. The term did not require 3 to directly inform consumers of any such changes.
3 has agreed to amend the term to:
We may publish an acceptable use policy which provides more detail about the rules for use of certain 3 Services in order to ensure that use of 3 Services is not excessive, to combat fraud and where new 3 Services we may introduce require certain rules to ensure they can be enjoyed by our customers. If we publish a policy, we will let you know such a policy may be amended from time to time - for instance, if we discover that the 3 Services are being used fraudulently or for fraudulent purposes, or the excessive use of certain 3 Services is causing problems for 3, its systems, or for other users or if we introduce new services which may require certain rules to ensure that such new services can be enjoyed by our customers, again, we will let you know if this happens.
[...]
The font size in the Contract is noticeably smaller than in the rest of the documents in the information bundle given to new customers. Ofcom considered that this could be potentially unfair under Regulation 7, which states that a seller or supplier shall ensure that any writtern term of a contract is expressed in plain, intellegible language.
However, in the absence of a specific complaint or evidence of consumer detriment, Ofcom has reserved its position in respect of the size of the font. Ofcom will revisit this issue in the event that any evidence arises of potential or actual unfairness to the detriment of consumers and, if necessary, take formal enforcement action under the Unfair Terms in Consumer Contract Reguations 1999.
On the basis of the above, Ofcom has closed the investigation.
It should be noted that Ofcom does not have the power to "clear" terms under the Regulations. Only a court has the power to determine whether a term is unfair under the Regulations. Ofcom is therefore able to consider any further complaints regarding this or any other contractual terms and conditions.
Full Document: http://www.ofcom.org.uk/bulletins/comp_bull_index/comp_bull_ccases/closed_all/cw_888/
Complainant: A member of the public
Complaint against: Hutchison 3G (UK) Ltd (3)
Case opened: 9 January 2006
Case closed: 2 May 2006
Issue: Alleged unfair contract terms
Relevant instrument: Unfair Terms in Consumer Contracts Regulations 1999 (the Regulations)
Ofcom received a complaint in relation to a term in 3's Cellular Service Standard Agreement.
Ofcom has considered the terms and conditions contained in all the documents that constitute the Cellular Service Standard Agreement (the Contract) and has now closed its investigation. In relation to all but one issue raised by Ofcom under the Regulations, 3 has amended its contract to the satisfaction of Ofcom (for details see below). In relation to one further issue concerning the font size of the terms and conditions, Ofcom has reserved its position. Ofcom will revisit this issue in the event that any evidence arises of potential or actual unfairness to the detriment of consumers.
(i) Clause 2.1 of 3's terms and conditions required consumers to agree to terms in all documents produced by 3, including those 3 might publish in future.
Ofcom regarded this term as potentially unfair under paragraph 1(i) of Schedule 2 of the Regulations (the Schedule), because the terms could irrevocably bind consumers to agreements with which they had no real opportunity of becoming acquainted. Ofcom also regarded this term as potentially unfair under paragraph 1(j) of Schedule 2 of the Regulations, because the clause could allow 3 to bind the consumer to any changes they chose to make to the terms.
3 has agreed to amend the term to:
Your agreement is made up of the Terms for 3 Services and your Price Plan, along with any other terms laid down in selected Additional 3 Services on the Handset. Additional terms may apply to any promotional or special offers.
(ii) Clause 3.6 of the Care3 Terms section of the contract, and clause 5.4 of the Terms for 3 Services explained the circumstances and process through which handsets locked to the 3 network would be unlocked.
Clause 5.4 of the terms and conditions further explained the process by which 3 would unlock handsets locked to their network: if customers wanted to have their phone unlocked, their account needed to be up to date, and the price paid for the handset would be the full retail value of the handset. If these requirements were met, 3 would then arrange for the handsets to be unlocked, for a fee.
Ofcom considered these two terms to be potentially unfair under paragraph 1 (i) of Schedule 2 of the Regulations, and paragraph 5(1) of Schedule 2 of the Regulations because they created an imbalance between 3 and consumers, by making reference to the consumer's liability to pay the full handset price, without clearly explaining the circumstances in which this would apply and how it would be implemented. The use of words such as title in the term also appeared to be potentially unfair under Regulation 7, which requires the use of plain, intelligible language.
3 has agreed to change the terms to:
Handsets which can be used to access 3 Services are locked to our network. The software in the Handset and all intellectual property rights in that software is owned by the Handset manufacturer and you are being allowed to use the software on a limited licence from the Handset manufacturer. During the term of your agreement for the supply of 3 Services, you must not permit your Handset to be unlocked via any unauthorised manner (i.e. by anyone other than us or the Handset manufacturer). You must contact us if you want your Handset to be unlocked from our network. If you contact us to request that your Handset be unlocked from our network, we will arrange for your Handset to be unlocked in an authorised manner (which may include replacing your Handset with an unlocked Handset which is the sam e or similar specification to your Handset) and you must pay an unlocking administration charge (which will be shown in the Price Guide for 3 Services). In addition, if you have had your Handset for less than 12 months, you will also have to pay the Handset Unlock Fee (this is also shown in the Price Guide for 3 Services). In addition, you must ensure that there are no outstanding amounts owing on your 3 account. Prior to us arranging for your Handset to be unlocked, you must ensure that you back-up or otherwise store separately any of your information or other data on the Handset which you may require, as this may be lost during the Handset unlocking process. We are not responsible for any information or other data which may be lost during the Handset unlocking process.
(iii) Clause 6.7 of 3's terms and conditions stated that 3 might publish an acceptable use policy providing more detail about the rules for use of certain 3 Services, that, if 3 did publish such a policy, it might amend it from time to time, and that consumers could view it on 3's website or request a copy from 3 Customer Services.
Ofcom regarded this term as potentially unfair under paragraph 1(i) of Schedule 2 of the Regulations, as it did not give consumers a reasonable opportunity of becoming acquainted with either the existence of an acceptable use policy, or any change in that policy, which forms part of their contract. The term did not require 3 to directly inform consumers of any such changes.
3 has agreed to amend the term to:
We may publish an acceptable use policy which provides more detail about the rules for use of certain 3 Services in order to ensure that use of 3 Services is not excessive, to combat fraud and where new 3 Services we may introduce require certain rules to ensure they can be enjoyed by our customers. If we publish a policy, we will let you know such a policy may be amended from time to time - for instance, if we discover that the 3 Services are being used fraudulently or for fraudulent purposes, or the excessive use of certain 3 Services is causing problems for 3, its systems, or for other users or if we introduce new services which may require certain rules to ensure that such new services can be enjoyed by our customers, again, we will let you know if this happens.
[...]
The font size in the Contract is noticeably smaller than in the rest of the documents in the information bundle given to new customers. Ofcom considered that this could be potentially unfair under Regulation 7, which states that a seller or supplier shall ensure that any writtern term of a contract is expressed in plain, intellegible language.
However, in the absence of a specific complaint or evidence of consumer detriment, Ofcom has reserved its position in respect of the size of the font. Ofcom will revisit this issue in the event that any evidence arises of potential or actual unfairness to the detriment of consumers and, if necessary, take formal enforcement action under the Unfair Terms in Consumer Contract Reguations 1999.
On the basis of the above, Ofcom has closed the investigation.
It should be noted that Ofcom does not have the power to "clear" terms under the Regulations. Only a court has the power to determine whether a term is unfair under the Regulations. Ofcom is therefore able to consider any further complaints regarding this or any other contractual terms and conditions.
Full Document: http://www.ofcom.org.uk/bulletins/comp_bull_index/comp_bull_ccases/closed_all/cw_888/