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Every cell phone contract is structured differently, but most have the following features in common:
What causes confusion with many cellphone contracts is that once the contract has ended (for example, you’ve paid your monthly instalments for 24 months and you now assume your contract has ended), many people will still receive bills from their cell phone service provider. The reason for this is that there are usually two parts to any cell phone contract.
The first part is paying for the actual phone. If you paid your monthly instalments for 24 months, at the end of those months the phone is yours.
The second part is paying for the service package (monthly data, SMSs or talk time). This part of the contract continues even after your 24 months are over, because there is an automatic-renewal clause. This means that unless you tell them to stop, they will renew the contract to continue providing the service package (monthly data, SMSs or talk time). Even if you throw away your SIM card or don’t use it, the service provider is still providing you with this service and therefore they will still deduct from your account.
In 2011 the Consumer Protection Act required cell phone contract service providers (and other establishments that love using automatic-renewal clauses, like gyms) to give the customer notice when the contract is ending. This must be done not more than 80 days and not less than 40 business days from the date of contract ending. They must tell you the date of expiry of the contract, any changes to the contract if it renews, and that the agreement will be automatically continued on a monthly basis until you tell them to stop. Even with this change in the law, we often find that the notices are misunderstood or not read.
To be on the safe side, here are some tips to avoid being caught out by an automatic renewal clause:
This may sound daunting, but remember if you’re a Scorpion member you can call 0861 333 333 to get hold of our Legal Contact Centre 24 hours a day, 7 days a week. Let us help you understand your contract before or even after you’ve signed – if you need assistance to check if there is an automatic-renewal clause or to help send a letter saying you do not want to renew your contract.
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We have a team of lawyers available to answer your legal questions every first Thursday of the month from 11:30 to 13:30 on the Scorpion Legal Protection Facebook page for free. Have your legal question answered on the spot at the Scorpion Live Q&A.
* This is only basic legal advice and cannot be relied on solely. The information is correct at the time of being sent to publishing.
Date added: 27 June 2022
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