Birmingham MP says Secretary of State should step in as Dial a Mobile collapse makes thousands vulnerable
25 September, 2007
Birmingham MP, Roger Godsiff, today called for a change in legislation that would prevent companies offering ‘cash back’ deals on mobile phone contracts which leave customers still having to pay for expensive airtime contracts when these companies collapse.
Roger Godsiff MP said: “I have written to the Secretary of State, John Hutton, at the Department for Business, Enterprise & Regulatory Reform, asking him to intervene following the closure of the Dial a Mobile Group shop in Bordesley Green which left thousands of customers facing expensive monthly contract fees without the cash back that was originally promised. Clearly, the regulator needs to be involved as well.”
He went on to say: “This is not the first time that this has happened in Birmingham and the practice of offering attractive cash back offers on expensive airtime contracts continues with the tacit approval of the airtime providers. In many cases the airtime providers do not even insist on copies of contracts being supplied to them by retailers who are selling on their behalf. When that retailer folds customers are then left relying on the ‘goodwill’ of the airtime provider concerned and this is cleary unsatissfactory and can lead to genuine hardship.”
Birmingham Trading Standards are advising people to write to their airtime company to ask them to release them from their contract, however whether the companies do this will depend on their goodwill. A template of a letter to the airtime provider can be downloaded from www.birmingham.gov.uk by following the links to ‘Trading Standards’.
Consumer Direct, set up to complement the work of Trading Standards, focuses only on criminal offences and advises customers affected by phone traders becoming insolvent to argue that the mobile network provider shares a responsibility under a ‘collateral contract’. It points out however that there are no precedents here because no one can afford to take the network providers to court. Consumer Direct (call 0845 4040506, www.consumerdirect.gov.uk).
Dial a Mobile Group Plc, formerly Mobile Connections, closed it’s shop in Bordesley Green at the end of August. The company has said that cash backs will not be honoured at the moment and no future date has been provided. Even though customers of Mobile Connections may cancel their contract with Dial a Mobile Group PLC, it will not release them from the separate contract that they have with their airtime provider and they will still be expected to pay the full monthly contract fee. Customers should however make a point of requesting a copy of their contract from the airtime provider.
Trading Standards are attempting to meet with the airtime service providers and OFCOM, the telecommunications regulator, to try to find a resolution to this problem.”
