3. Case Notes: Example one
The following cases illustrate some of the problems that small businesses have experienced with equipment leases bundled with telecommunication deals. The cases are presented from the perspective of the small businesses and do not represent completed TIO investigations.
Example one
A small business owner was approached by a salesperson who said that for $400 a month - less than what she was paying with her current provider - he would provide four business landlines and also supply "at no cost" a 50-inch plasma television and $4,000 worth of phone handsets.
The salesperson said that to obtain the deal, the owner would have to sign a five-year contract. After gaining a verbal reassurance that the plasma television and the handsets were indeed "free", the owner signed the five-year contract. After a short time, the owner approached the TIO seeking to be released from the contract.
She claimed that:
This led to significant problems for clients trying to call the business.
The small business owner decided to transfer her service back to her original provider and attempted to be released from the five-year contract. She was then advised that as well as a contract for telephone services she had also signed a five-year finance contract for the “free” television and phone handsets. The finance company, which said it had no relationship with the telephone service provider, said she would have to pay $25,000 to be released from the finance lease. The woman said the plasma television was worth only $3,000.
