'Guarantors' signing contracts

Mobile phone companies do not usually allow for guarantors. However, the TIO has received and investigated many complaints from complainants who believed they had signed a contract as a guarantor.

Usually, the TIO will investigate these types of complaints on the basis that as the contracts commonly used in the industry do not allow for guarantors, there may have been misleading conduct at the point of sale which has induced the complainant to sign the contract. Moreover, if the complainant argues that they did not understand the implications of acting as guarantor, the TIO will also investigate.

In investigating these types of complaints, the TIO seeks to identify whether or not the mobile phone company allows for guarantors and, if not, in what capacity the complainant signed the contract. Where it is established that the complainant signed as account holder rather than guarantor, the TIO attempts to identify what exactly was discussed and agreed upon at the point of sale. To this end, statements from all parties are sought. Where the available evidence suggests the complainant was misled, the TIO will expect the provider to release them from the contract.

Were a mobile phone company to allow for a guarantor, the TIO would need to establish that the provider made the guarantor aware of the implications of any decision to take on this role and that the guarantor indicated their intention to be legally bound. Under the Credit Management Code, a guarantor must be advised, in writing, of the nature of their guarantee and their obligations. Where there is no evidence that such notification was provided, the TIO would expect the provider to release the customer from the contract of guarantee.

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