Mobile phone contracts `unfair'

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Nine out of 10 of the country's leading mobile phone suppliers require consumers to sign contracts that are unfair, unintelligible and littered with sneaky small print, the Office of Fair Trading announced yesterday.

Orange, Vodaphone, Cellnet, Mercury, Astec Communications, British Telecom, The Peoples Phone Company, Motorola Tel-co, and UniqueAir, have all been threatened with possible legal action unless they improve their contracts.

John Bridgeman, director-general of fair trading, said yesterday: "I have asked these businesses to drop unfair terms. If they do not, I may have to seek an injunction to prevent the use of such terms in the future. The sort of terms I am concerned about are those which unduly weight the contract against the consumer and in favour of the business.

"They could, for instance, be in small print or exclude a company for responsibility for what its representatives say."

Some contracts contain up to 100 clauses which few consumers would understand. Contracts should contain "no `hidden' terms", and the terms in small print should not be in print much smaller than is used in any other documents intended to be read and understood, said Mr Bridgeman.

He said he was unhappy with some contract terms, of which each company was guilty of at least one. These included the length of time consumers were tied into the contract, the lack of a "cooling off" period once the contract was signed, the fees payable for disconnecting from a service and the absence of a full cash price alternative to the price of a subsidised handset.

The industry regulator, Oftel, which receives around 4,000 complaints and queries each year from customers with mobile phones, supported the OFT's action. Don Cruickshank, Oftel's director-general of telecommunications, said: "The single biggest area of concern to these customers is the terms included in contracts."

Vodaphone caters for 2.5 million of the UK's 5.5 million mobile phone subscribers. A spokesman explained why it had 12-month contracts. "The phones are heavily subsidised by the operators. . . A customer can buy a phone on the high street for pounds 25 that probably cost pounds 250 from the manufacturers."