T-Mobile data cap backfires horrendously: and here’s how to cancel your contract

T-Mobile’s announcement that it was going to slash the data allowance on its phones to just 500MB has been met with outrage and shock by its customers – and it now it looks like they might not be able to get away with it.

Our software dev friends at Little Fluffy Toys (LFT) took a close look at their T-Mobile contact and discovered that the data cap was in breach of the company’s own clause 7.2.2.3, and so promptly – and unilaterally – terminated their own contract.

Here’s their story:

T-Mobile UK has reduced the data allowance on direct Android contracts by 83%, and offered to restore the 3GB allowance for an extra £15 per month. Since direct Android contracts require a mandatory data bundle (you can see this even today when you go to tmobile.co.uk to buy an Android phone – the 3GB data is always included), this means the 3GB data allowance forms part of your price plan just like e.g. your 800 minutes or 500 texts does, as explained in the letter below.

T-Mobile has therefore inflated the cost of your Price Plan Charge by £15 per month, which is substantially more than the Retail Price Index, and whilst we are not offering you legal advice, we believe that if you have an Android contract from T-Mobile that was taken directly with them instore or online or by telesales, you are at liberty to cancel it without notice under clause 7.2.2.3 of the contract, with no legal requirement to return your phone, and that this would be upheld in a court of law.

We wrote this before we even realised the significance of Ofcom regulation 9.3 which requires T-Mobile to tell you that you have the ability to terminate the contract without penalty if the proposed modification is not acceptable to you. This clause will be useful to you if you got your Android phone through a third party like Carphone Warehouse and therefore only had a 1GB rather than 3GB data allowance.

We anticipate that when T-Mobile appreciates the magnitude of their error in believing they could trash 83% of our service by claiming that data was not a Price Plan Service, they will restore our data allowances.

Remember though that if T-Mobile offers to restore the 3GB after you have terminated the contract, you are under no legal obligation to agree to restore the contract.

Remember also that once you have terminated your contract it is for T-Mobile to prove that you owe them any termination fees and not for you to prove that you do not, and so you should not pay any termination fees and insist that they should take you to court to enforce them. Ignore any threats about credit reference agencies – if they were to report a sum in dispute as a debt then they could face defamatory damages.

This is what we have today sent T-Mobile to terminate our contracts with immediate effect. Feel free to use it yourself or adapt it to your own needs. Note that this is suitable for direct Android contracts only – if you didn’t get your Android phone from a T-Mobile store or their website or telesales then you need to amend it accordingly according to the contract that you have.

If your included data allowance is 1GB rather than 3GB (which is usually the case for indirect Android contracts sold through a third party such as Carphone Warehouse), T-Mobile is offering to top you up from their reduced 500MB to the 1GB you previously had for £5 a month, which still represents a price increase of core services that substantially exceeds the Retail Price Index and therefore the inflationary termination clause applies – you would need to change all references of 3GB to 1GB and £15 to £5, remove references to “direct” since it’s not a direct contract, and then check it through to ensure that it still makes sense.

Here’s the letter they sent T-Mobile’s parent company, Everything Everywhere Ltd’s, CEO:

Tom Alexander
Chief Executive Officer
Everything Everywhere Limited trading as T-Mobile
Hatfield Business Park
Hatfield
AL10 9BW
11th January 2011

Dear Mr Alexander
I hereby terminate without notice my contract with your company under phone number [our number], due to your company’s breach of its obligations under our contract. I require my PAC code to be sent within seven days of receipt of this letter, and that you do not allow my number to lapse until it has been transferred to a more respectful service provider.

The contract with T-Mobile defines Price Plan Service as a Service included in the price plan, and an Additional Service as an optional extra Service that can be added to the account. Since data is required and not optional for Android contracts (plainly visible on your website even this afternoon), data on T-Mobile Android contracts is a core Price Plan Service and not an Additional Service.

The contract further defines Price Plan as the bundle of Price Plan Services for which the Price Plan Charge applies. This bundle of Price Plan Services includes 3GB of data for direct Android contracts.

T-Mobile is offering its Android customers what they currently have, 3GB of data, for an extra £15 per month. This is indisputably a rise in the price of Price Plan Services to which the Price Plan Charge applies.

For your direct Android customers, the 3GB data allowance forms an identical part of the core Price Plan Services as the inclusive minutes and texts. You can no more reduce my data allowance by 2.5GB and then offer to sell it back to me for £15, than you could take away 300 of my inclusive minutes and then offer to sell the same 300 minutes back to me for an extra £15 per month. It’s a ludicrously transparent deception to attempt to disguise this price rise in this way.

Since the Price Plan Charge for the Price Plan comprising the core Price Plan Services has risen by £15 per month, this is substantially more than any increase in the Retail Price Index for the previous 12 months, and thus under clause 7.2.2.3 of the contract, I am writing to immediately terminate my contract with you.

In addition to being in breach of clause 7.2.2.3 with all your Android direct customers, I am giving you formal notice that since T-Mobile intends to modify a condition in a contract with a consumer which is likely to be of material detriment to the consumer, specifically the data allowance as part of the bundle of Price Plan Services to which the Price Plan Charge applies and which forms part of the contract for all Android customers, you have a duty and furthermore an obligation under clause 9.3 of the Ofcom general conditions under section 45 of the Communications Act 2003 to tell all Android personal customers, whether or not they came to T-Mobile directly, that they have the ability to terminate the contract without penalty if the proposed modification is not acceptable to them, furthermore that you must give them 28 days’ notice rather than the 21 days that you did.

I also revoke any automatic payment mechanisms you have in place for either account with immediate effect, and thus any further automated collection of payments constitutes fraud on T-Mobile’s part.

Any attempt on your part to claim early termination fees should be pursued through the courts, which I will be absolutely delighted to defend.
Yours sincerely

Here’s what Kenton Price at LFT is now saying to their customers after, err, DataGate:

I am deeply embarrassed that for the past 18 months we have evangelised T-Mobile as the Android network of choice for our customers, business partners and friends.

If sufficient customers refuse to accept T-Mobile’s poorly-disguised above-inflation price rise and terminate their contracts forthwith, as they appear to be perfectly entitled to do, it could potentially expose shareholders in Deutsche Telecom and France Telecom to losses running to tens or perhaps hundreds of millions of euros from unrecoverable handset subsidies.”

He adds that it’s important to note that no-one needs to seek T-Mobile’s permission to terminate – if clause 7.2.2.3 applies to you then it is your right under the contract to terminate it without notice, so in this case you just TELL them that the contract has been terminated, and it’s then up to T-Mobile if they want to try to chase you for a termination fee.

If they do, dispute the fee so that it cannot appear on your credit reference files, and be prepared to argue the case you have outlined if they take you to court to pursue their perceived debt.

UPDATE Weds 12th Jan 17:40 – T-Mobile perform massive backtrack in the face of customer outrage over data cap