Why do contracts with mobile phone companies always end in tears?

Unfortunately, all of my experiences with mobile phone companies have been negative, especially when it comes to contracts that lock you into a recurring payment for 12 months or more. Once you have signed up, these companies can effectively get away with all sorts of shady practices to rake in the profits. Imagine a country like the UK with upwards of 64 million people where a mobile phone company can have of the order of a few million customers. They only have to slip a small charge onto everyone's bills, say 5p for a connection charge for a call that mysteriously disconnects after a couple of seconds, and most people will not think twice about it. However, this generates a neat profit of the order of hundreds of thousands of pounds! If such abuses become systematic (which they are), then they can potentially generate millions of pounds of extra revenue!

I have had plenty of phone bills in the past where small amounts were added for services that were either not in my contract, or I could not remember having made the corresponding calls etc. And sometimes the amounts charged were not small, as in the case of Telefonica Espana charging 40 euros for a technician to set up a phone line in a house when the first mention that such a charge would be levied was on the bill that arrived after the work was finished! Or as in the case of Vodafone Germany, where I signed up for a mobile contract in a shop, and the sales person took advantage of my obvious lack of the German language to con me into signing up for services that I did not want (and it took months to claim back the relevant moneys and cancel the contract properly).

Anyway, there is no point in describing all of these unpleasant experiences in gory detail. Instead, I have chosen to describe one case that highlights the lengths that mobile phone companies will go to in order to squeeze all of the money they can out of you and to make you suffer as much as possible when you stand up to them. However, with a little perserverance, you can always win out against these malpractices, and in this case it spectacularly backfired on Orange (France Telecom Espana) when they were fined 60101,21 euros for their efforts to intimidate and bully me for refusing to pay a bill that was erroneous.

A costly attitude for Orange

Lets keep this short and to the point, even though the whole fiasco lasted for two years and generated a stack of paperwork (well worth it though given the outcome!).

Effectively, Orange had been erroneously charging me taxes on my mobile phone bills at a rate of 16% during an 18 month mobile phone contract, when I was actually exempt from these taxes because these taxes are not paid for residents of the Canary Islands. This was pointed out to me by the sales assistant in the Orange shop on La Palma when I went to renew the contract. It turns out that I was owed a total of approximately 200 euros (and it is doubtful that Orange ever passed these "taxes" on to the Spanish government). Since my final bill of the contract was still due to be paid (approximately 56 euros), I immediately contested it, and I also tried to claim back my 200 euros. However, this proved to be impossible, because Orange customer care refused to even talk to me about the issue until I had paid my final bill! Did they really believe that I would send them any more money, some of which was not even owed (the 16% taxes on the final bill), if they wouldn't even discuss the problem?

Anyway, this left me with only one course of action, to complain to some official consumer protection entity in Spain. In April 2008, I wrote a complaint to the "Secretaria de Estado de Telecommunicaciones y para la Sociedad de la Informacion" (SETSI for short). Of course this meant lots of paperwork backwards and forwards for a while. No problem. I was ready for a fight.

Then, in the same month, the bullying by Orange commenced. I started to receive regular phone calls and letters from multiple debt collection agencies telling me to pay the final bill within a few days or face legal action (companies involved were Treym Consulting y Servicios a Empresas, Credipor S.L., Ana Isabel Carreras Presencio Abogado, Asnef Equifax, and Experian). There was no way I would be intimidated. Maybe their lawyers were not very good, but they should have known that as soon as you lodge a complaint with SETSI, no action (legal or otherwise) can be taken against you until the case is resolved.

Well, they made a big mistake. Orange put the person named on the mobile phone contract (not myself, although I was paying the bills) on a credit blacklist in Spain in mid-July 2008, while the complaint to SETSI was still under consideration. This practice is illegal and I took great delight in opening up another complaint file, this time with the Spanish data protection agency (AEPD). Orange went into overdrive on trying to weasel out of the corner they had manouvered themselves into with the AEPD. Their company lawyers stated in writing that they had no knowledge of my complaint to SETSI when they added the name to the credit blacklist, even though the same company lawyers had already responded a few months earlier to letters from SETSI about the case! Obviously, blatant lying to avoid legal penalties seems to be an acceptable practice at Orange!

It took quite a while for this process with the AEPD to come through, but in December 2009, Orange (France Telecom Espana) was fined 60101,21 euros for their actions (see this public announcement). Fair enough, since placing someone on the blacklist of a credit agency can have a massively negative impact on their lives, such as stopping them from obtaining a mortgage (don't get me started on credit agencies, that actually charge you to check your credit rating! I would never pay anything to a credit agency out of principle...). I congratulate the Spanish administration on the way they protect the rights of the customer and for dealing with this case carefully and properly (although the process could be made to come to a resolution somewhat faster).

Unfortunately, a few months later (and more than two years after the original complaint), SETSI decided that they could not rule either way on the issue of the taxes, and that to follow up the matter further, I would have to take my complaint to a different official entity. But this was now a moot point for me. Apart from having left Spain by then, my goal of teaching Orange a lesson or two in how to treat their customers had been achieved. Maybe they will think twice next time about the benefits to both sides in actually trying to settle matters amicably and reasonably before they have to reach such extremes. After all, without their customers, they are nothing. I will never use Orange again!

Advice for people who find themselves in a similar situation

• Do not be afraid to contest items/charges on a phone bill. Always try and take the issue up first with the mobile phone company (if they let you...).
• If you cannot resolve the issue directly with the mobile phone company, then refuse to pay the bill in its entirety (this is your right since the bill is erroneous) and make a complaint to the relevant official consumer protection agency.
• In Spain at least, while your complaint remains unresolved, you are protected from any kind of punitive/legal action initiated by the mobile phone company.
• If they put you on a credit blacklist during the time the complaint is being considered officially, then make a further complaint to the Agencia Espanola de Proteccion de Datos (AEPD). The form to fill out is very simple, and requires very little paperwork from you. The AEPD does all of the relevant investigations for you and will fine the mobile phone company (minimum amount of 60101,21 euros) and clear your name with the credit agency.

However, the best advice that I can give you is to avoid mobile phone contracts altogether. Simply use pay-as-you-go, topping up when you need to. If you feel that a contract is really necessary, then choose one with the shortest duration possible (and yes, there are contracts out there that can be as short as 1-3 months).