The Complaint:

The complainant claimed that a mobile phone salesperson approached him purporting to represent a major phone service provider. The salesperson offered the complainant “the best deal in town for business mobiles ever”, including call rates that were about “40 per cent less than any other service provider”.

It subsequently emerged that the salesperson worked for a company that acted as an agent for the phone service provider.

The salesperson also offered the complainant:

• nine state-of-the-art mobile phones, which would be provided to his employees and individually billed to them.
  
• the phones would be available within seven to 10 days of the offer being accepted by the complainant.
  
• the phones would be connected to the phone service provider’s network on the day that they were delivered.
  
• the salesperson would hand deliver a contract to the complainant and confirm that everything was in order.

The complainant says that what actually occurred was:

• he discovered that all the bills were made out to his company and not to individual employees.
  
• two of the phones were from the top of the range, the rest were the basic model.
  
• some of the phones took as long as a month to arrive.
  
• one phone was connected to the network within 48 hours, with most connected between two to three weeks after receipt. The complainant said that the delay was attributed to faulty SIM cards. He said that he was unable to contact the agent to resolve this problem and eventually went directly to the phone service provider. Because of this experience some employees cancelled their phones, resulting in his company incurring cancellation fees.
  
• the company never received a copy of the contract in all its dealing with the agent and the phone service provider.

The complainant said that in the seven or so months that his company had the phones, they were disconnected several times and “subsequently became so commercially embarrassing to our business that we could not use them”.

Responding to the TIO’s investigations, the phone service provider confirmed that a number of the contracts had been cancelled by the individual users and, as a result, cancellation fees of about $3500 had been imposed. When this was brought to the phone service provider’s attention the next month, the cancellation fees were waived.

The phone service provider also offered a number of gestures of good will to the complainant, which included:

• crediting the up-front costs of two unused handsets.
  
• a one-month credit of access fees for each account.

However, the phone service provider said it was not willing to consider the complainant’s contention that he was offered call rates 40 per cent less than other companies without seeing a copy of the contract. While its agent had not been able to produce a copy of the contract, the phone service provider maintained that the complainant was still under contract and thus liable for all charges, including cancellation fees if he wished to cancel the contract.

TIO Response:

The TIO asked the phone service provider for a copy of the original contract, which was allegedly agreed to between the phone service provider’s agent and the complainant. The TIO’s preliminary view was that the complainant should be released from the contract if the documentation could not be provided. The TIO noted the complainant’s advice that he would not have entered into the agreement if he had not been promised rates that were “approximately 40 per cent less than any other service provider”.

The Outcome:

The phone service provider responded that as the dealer had ceased trading it was not possible to obtain a copy of the contract. The phone service provider said that as a result it was prepared to release the complainant from his account with the payment of $2300, which represented the cost of calls made on the mobile phones his staff had received.

The TIO’s view was that the phone service provider’s offer represented a “fair and reasonable” resolution to the complaint and that he accept it, which he did.