Possible Reneging on Contract by Provider

S

SparkRite

Registered User
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Here's a good one that I would like some advice on please.

A well known broadband/TV provider in Ireland that I am a customer of has just emailed me stating that my tariff will
increase in January 2020.
Now, last Jan.2019 I made a call to them looking for a better price following their last increase. A customer rep. offered me
€x for 6 months or €x+y for LIFE !
I queried does 'Life' actually mean 'Life' or until their next increase ?
I was told that as long as I remain as a customer my set price will NOT change.
I asked the Cust. Rep. to check this and was put on hold while they did so.
Upon resuming the call it was re-iterated to me that the offer is indeed 'For Life'.
So obviously I said I would accept that offer and agreed to pay €x+y monthly.
I also asked for an E-mail stating this offer but was told no need as I can see on my online account that it states
'Fixed price', which it did.
Happy days.....or so I thought.

Roll on Oct.2019 and I am emailed that my 'for life' offer is going up in Jan. 2020.
After calling them and explaining the above (to no avail) I requested a copy of the initial call under GDPR.
The next day I receive a call from the GDPR dept. who had listened to the tape and agreed with me that
I was offered the 'for life' contract but went on to say that the Cust. rep. had 'made a mistake' and no such
offer exists. They went on to offer me a waiver of the forthcoming increase for 12 months and a credit of
one months fee. This I feel is a derisory offer, in that the potential difference between what I 'signed up for' and approx.
€95 'goodwill' is in the thousands of Euro.
As most companies are only too quick to hold you to telephone contracts, should it not also be true that they have to
honor the contract too ?

What do people think would be a reasonable outcome/offer and also where could I go with this, failing a resolution with my provider?

TIA.
 
Not sure how you get "is in the thousands of euros" but then I don't know your age, so potentially you could be correct

I think you have a very good chance of getting your contract agreed but it will be a fight - do you have a copy of the call?
 
Just email them with a summary of what happened and their recent offer.

Point out that you have a valid contract in place and you are not accepting their offer and you will not be paying any increases ever in the future. Tell them that you value this contract at €10,000 and will, reluctantly, accept this price if they want to buy you out of the contract.

I very much doubt that they will attempt to renege on it.

This salesman must have offered this deal to others as well.

Very embarrassing and potentially embarrassing for the company, but you should hold them to it.



Brendan
 
jpd said:
Not sure how you get "is in the thousands of euros" but then I don't know your age, so potentially you could be correct

I think you have a very good chance of getting your contract agreed but it will be a fight - do you have a copy of the call?
Click to expand...
Very easy get into thousands, the deal I'm on, after next Jan will be €10 a month less than full price, ie. €120 a year difference.
Now allow their usual increase of around 6 - 7% per annum, it VERY quickly grows into the aforementioned thousands.

Awaiting a copy of the call.
 
Brendan Burgess said:
Just email them with a summary of what happened and their recent offer.

Point out that you have a valid contract in place and you are not accepting their offer and you will not be paying any increases ever in the future. Tell them that you value this contract at €10,000 and will, reluctantly, accept this price if they want to buy you out of the contract.

I very much doubt that they will attempt to renege on it.

This salesman must have offered this deal to others as well.

Very embarrassing and potentially embarrassing for the company, but you should hold them to it.



Brendan
Click to expand...

That's the way I look at it Brendan, but I get the distinct impression that they may well have a different view on things.

I would also like to ask where do I go with this, assuming they are not as embarrassed as I hoped.
 
€120 a year for 10 years would be €1,200

After 20 years, €2,400.

So, you could say that the value in today's money is about €2,000.

Brendan
 
But that's only if the full price remains static @Brendan Burgess , which it obviously won't.
So each year the difference will become greater, and after 10+ years will be appreciably greater.
 
In all honesty Brendan, 13 next year followed by 16.50 the next year, followed by 20 the year after and so on. Remember, that is per month.

I'm looking for them to honor their side of the contract, as I have mine, but assuming that they refuse to, where do I bring it?
 
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Hi SparkRite, tabulating a specific worked example showing the difference over 20 years and converting each year's difference to net present value would help illustrate your point. I agree it's in the thousands in today's money. I find it also helps the narrative to attach a fictional name to the provider, perhaps Vile Megacorp, or VM for short.
 
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SparkRite said:
I'm looking for them to honor their side of the contract, as I have mine, but assuming that they refuse to, where do I bring it?
Click to expand...

Hi Spark rite

I fully agree with you that they should honour their contract.

But in today's money it's worth €10 a month or €120 a year.

Do if you expect to stay with them for 10 years, the value in today's money €1,200.

Brendan
 
MugsGame said:
converting each year's difference to net present value
Click to expand...

HI Mugs

You can assume that the discount rate is the same as the rate of the price increase, so just multiplying today's saving by the number of months gives you a best estimate of the answer.

Of course, you could assume that VM will increase the price by 20% a year and general inflation will be 1% a year, and you would get a different answer.

Brendan
 
Brendan Burgess said:
HI Mugs

You can assume that the discount rate is the same as the rate of the price increase, so just multiplying today's saving by the number of months gives you a best estimate of the answer.

Of course, you could assume that VM will increase the price by 20% a year and general inflation will be 1% a year, and you would get a different answer.

Brendan
Click to expand...

6-7% historical annual increases in Sparkrite's example vs 1% inflation.
 
Is there really a contract that is enforceable as I don't see there is, there is no written contract.

If a mistake was made by an excited employee then it is hard to expect any company to honour it.

See how you get on but take their best and final offer when made.
 
Palerider said:
Is there really a contract that is enforceable as I don't see there is, there is no written contract.

If a mistake was made by an excited employee then it is hard to expect any company to honour it.

See how you get on but take their best and final offer when made.
Click to expand...

Service providers are well known for enforcement of verbal/phone recorded contracts.
The fact remains that I entered into a contract in good faith, as was offered to me by a representative of that company.
I don't think it's acceptable for them to then turn around and say" Ah look we made a mistake, we want more money from you, so let's forget what we
offered you last time. "

Thanks for the replies so far.

I have asked a few times, but no answer thus far, so does anybody know where I could bring this, assuming that the provider does not honor what they offered me, please?
 
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Brendan Burgess said:
HI Mugs

You can assume that the discount rate is the same as the rate of the price increase, so just multiplying today's saving by the number of months gives you a best estimate of the answer.
Brendan
Click to expand...
Brendan, it is NOT a discount rate, it is a fixed price. So annual increases and inflation over the forthcoming years will make the potential savings quite an attractive amount.
 
SparkRite said:
Brendan, it is NOT a discount rate, it is a fixed price. So annual increases and inflation over the forthcoming years will make the potential savings quite an attractive amount.
Click to expand...

The second part of this definition.
www.investopedia.com

Discount Rate Defined: How It's Used by the Fed and in Cash-Flow Analysis

"Discount rate" has two distinct definitions. It can refer to the interest rate the Federal Reserve charges banks for short-term loans, but it's also used in future cash flow analysis.
www.investopedia.com www.investopedia.com
 
SparkRite said:
Brendan, it is NOT a discount rate, it is a fixed price.
Click to expand...

Hi Sparkie

The "discount rate" is the term used to describe rate you use to convert future euros to today's euros. It is nothing to do with the price of the product as such.

There is no reason to assume that the price of broadband and TV will rise by more or less than the general level of inflation. It might do, but, it's a very competitive market, and technology changes, so it's quite possible that it will increase by less than the rate of general inflation.

But in doing an example, I realised I was making a mistake.

Let's say that the price next year is €70 a month but you will have a fixed price of €60.

After ten years, the €70 will have increased to €77 so your saving will have increased to €17 a month.
That is €15 a month in today's money discounted back at 1%

So for the next ten years it will be worth about an average, in today's prices, of say €12 a month.

So today's value of the next ten years' savings will be €1,440 - not €1,200 as I said originally.

From a practical point of view in assessing any offer from the company to settle your claim, you should not go much beyond this.

Technology will change and this product may no longer be something you want. There may be much better products and offers out there.

Brendan
 
Thanks for that Brendan.
Historically the price increase with the provider in question has been a lot higher than the rate of inflation.
But I understand fully what you are saying.
I should have a copy of the call today.
 
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