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165 posts

Master Geek


# 38524 31-Jul-2009 05:53
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Just over two years ago, my sister purchased a Vodem and signed a two year data contract, $29.95 per month for 200mb.

Over the past few months her useage had gone up and consequently her monthly account was higher as she ended up using 500-600mb /month over a couple of months.   She dropped into the VF store where she had earlier purchased the Vodem and was told the reason her monthly costs had risen was that her two year contract had expired and she would need to re-sign for another two years to reduce her monthly costs.   She re-signed for two years without accepting any (nor was she offerred any) hardware upgrade or other incentive to re-sign.

Her monthly useage has continued to increase, consequently so have her monthly costs.   I was unaware she had re-signed when I advised her to get herself a fixed line broadband connection.   When she asked to cancel her data plan with VFNZ, she was told the break fee would be $300.   I have reviewed her monthly invoices thinking perhaps that when her first contract term expired her monthly plan fee had increased and by re-signing had perhaps been given a lesser monthly fee.  I seemed to recall in the eraly Vodem days the 200mb plan was $39.95 but reduced to $29.95 on a contract term.   This was not the case - her monthly data plan was consistent over the whole period, with extra data charges as her useage increased.

OK, so here'e where I have an issue...

Yes my sister re-signed a contract for two years and in doing so, agreed to a break fee.   However, I don't believe the information she was given by the store person was correct.   One normally re-signs a contract in order to perhaps gain a discount on new hardware or perhaps ensure maintaining a certain plan.   In my sisters case, she was advised to re-sign as this would bring her monthly costs down.   She was not told that her increased costs were to be expected as her data use was gradually increasing each month and offered a more appropriate plan.   Nor was she offerred any hardware upgrade.   Simply, she walked into the shop with an old Vodem and a 200mb/$29.95 data plan.   She walked out with her old Vodem, the same data plan, but now with a two year contract that she has to pay to get out of.   As I have told her, should she have accepted a hardware upgrade, contractually and morally she should pay the break fee, but since she has been given nothing by VFNZ (or in this case their franchise), she should not really have to pay a break fee.

Does this make sense?  It's very early in the morning and perhaps I'm rambling, but I'd appreciate your thoughts.   She has been met by blank stares at the store where she signed the "deal" - anyone know of a good place within VFNZ to start asking some questions?


Cheers

Darryn

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  # 240813 31-Jul-2009 07:04
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I'm not familiar with the terms of the vodem service/product however..

If she did she did not need to re-sign on a new 2 year contract to continue using the same plan she was currently on then it seems she was talked into signing a new contract for no need at all?

If that is the case I suggest it's could be argued to be a case of misleading, deceptive conduct or false representation under the fair trading act.

You can read more about her legal rights at the consumer site:
http://www.consumer.org.nz/reports/fair-trading-act
http://www.consumer.org.nz/category/legal-rights


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  # 240940 31-Jul-2009 12:44
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the 2 year term lets you save $10 a month - hardly worth it when the total saving is only $240 and there is a good chance of wanting to change in that timeframe.




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  # 240957 31-Jul-2009 13:03
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Yes my sister re-signed a contract for two years and in doing so, agreed to a break fee.??


Frankly, that's the only important sentence in this thread. I don't understand why so many people sign contracts, but are unwilling to follow through with their commitments. If the contract were grossly mirepresented I could see the problem. But it seems to me she knowingly signed a two year contract (which she probably didn't read), and now wants to get out. Which is fine, but if you committed to a break fee, then just pay it.



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Master Geek


  # 240967 31-Jul-2009 13:20
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I agree - that's why I included the sentence....

However, I suspect, having spoken to another VFNZ rep, that there was certainly an element of misrepresentation. What has my sister committed to? A free phone? Subsidised plan? Vodem upgrade? Nothing of the sort - simply some extra commission from a dodgy rep. She was told her monthly costs would reduce if she "signed here". They did not.

What did she get to warrant a $300 break fee - perhaps you need to re-read my initial post.





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Master Geek


  # 240968 31-Jul-2009 13:21
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PS - The First Mobile rep near me was astounded at what the intial VFNZ agent had done and felt my sister has a fair grievance, however was not sure who to talk to.

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  # 240970 31-Jul-2009 13:22
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IANAL, but for their to be a contract there has to be some consideration.

http://en.wikipedia.org/wiki/Consideration

"Consideration is a concept of legal value in contract law. It is a promised action, or omission of action, that the promisee did not already have a pre-existing duty to abide by. It can take the form of money, physical objects, services, or a forbearance of action. Both parties to a contract must pass consideration to the other party for there to be a valid contract."

If she has had nothing from the contract (no discount, no new hardware etc) then you could find that the contract is invalid.


NB.  Consideration does not usually have to be a fair value, it can be anything you like ($1 for example), but it must be there on both sides.

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  # 240974 31-Jul-2009 13:43
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$10 a month off seems to be more then enough for consideration in this case.

You sign the contract, you get to pay the early termination fee if you break it - its not like vodafone have failed to provide service etc which is the only way to get out of a contract really...




Richard rich.ms

 
 
 
 




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Master Geek


  # 240977 31-Jul-2009 13:50
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Except she did not get $10 off a month. If she did, not questions asked - pay the break fee.

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  # 240982 31-Jul-2009 14:02
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If she didnt get any benefit from the contract, then she has been royally screwed over by a rep who was just after commission on the contract.

Fair Go would love this one if her telco doesn't come to the party.







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  # 240997 31-Jul-2009 14:36
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What was she paying per month for the plan after the resign?




Richard rich.ms

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  # 241010 31-Jul-2009 15:15
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Is there a difference between what she is paying now and what she was paying before the re-sign?Have you given Jimmy a call? (his Mrs should know someone to talk to)




My views (except when I am looking out their windows) are not those of my employer.



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Master Geek


  # 241012 31-Jul-2009 15:18
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Yo Hairy,

No difference at all. She is paying exactly the same.

Might give Jimmy a call - good thought.

Cheers

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  # 241101 31-Jul-2009 21:50
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tonyhughes: If she didnt get any benefit from the contract, then she has been royally screwed over by a rep who was just after commission on the contract.

Fair Go would love this one if her telco doesn't come to the party.



How is she not getting any benefit from the contract?

A valid contract requires consideration from both parties. The consideration from her is the monthly fee she pays, and the consideration from Vodafone is the provision of broadband. Just because she did not receive any 'bonus' such as a subsidy does not mean that there is no consideration from Vodafone - her benefit from being in the contract is being able to use the broadband which Vodafone is providing her.

So unless the contract and its terms were misrepresented to her (e.g. she was told there would be no early termination fee), then I doubt there is anything Vodafone has done wrong here... presumably there is a term in the contract concerning an early termination fee which she could've read prior to signing up.

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  # 241117 31-Jul-2009 23:18
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Just to make this clear - are you saying that she was resigned for another 2 years on the SAME PLAN at the SAME COST?

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  # 241120 31-Jul-2009 23:24
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I would think the contract could be cancelled due to the mispepresentation - Contractual Remedies Act 1979 s7(3)

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