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Oxford don's legal fight over price rise signals trouble for phone giant

A law lecturer claims the small print in Three’s contracts may allow millions of its mobile customers to avoid higher bills
  • @martin_hickman

An Oxford University academic is locked in a battle of wits with one of Britain’s biggest companies over the small print in a contract, which he believes could offer hope for millions of mobile phone customers.

After eight years without a price hike, Three, the UK’s fourth largest mobile phone network, notified subscribers with iPhones and other handsets last month that their monthly packages would rise by 3.6 per cent on 16 July.

The Hong Kong-based corporation said the rise reflected increased costs and told those affected that they could not use it to escape their monthly contracts, which typically last two years.

But it appears to have reckoned without Andrew Dyson, a tutor in contract law at Corpus Christi College. Mr Dyson, a Three customer, decided to scrutinise the small print of his contract and claims that, unlike its rivals Everything Everywhere, O2 and Vodafone, Three has made a drafting mistake which means its customers can jettison their contracts, keep their phones and move to a cheaper tariff.

At the heart of his case, which he has set out in an 11-page paper published online, is a clause in Three’s terms and conditions, 10.1-(d) which allows customers to cancel within one month if there are “any variations to your agreement which are likely to be detrimental to you”.

Although Three’s price rise is only a shade above April’s 3.5 per cent rise in RPI, and works out at only 50p to £2 a month extra, Mr Dyson believes it allows dissatisfied customers to dump their packages without paying a hefty cancellation fee.

He says it could be a “potential disaster” for Three as customers could keep their expensive handsets and switch to much cheaper pay-as-you-go or sim-only options instead.

Mr Dyson, whose doctorate is on contract law, stresses in his paper that he is not legally responsible for anyone following his arguments, which he acknowledges are open to challenge in court and could lead to attempts by Three to tarnish customers’ credit record. But, having double-checked his case with other legal specialists, he is confident he is right.

He has cancelled his contract unilaterally and applied to the small claims court for a declaration that he has justly done so – in order to prevent damaging his own credit record.

“The rise is only about £1.50 a month so it’s not a life-changing amount, but it just pains me that Three are trying to steamroller their customers,” he said.

Three vigorously disputes his arguments, telling customers on its website that its terms and conditions allow it to raise prices in line with inflation. A Three spokesman said: “Our terms allow us to do this and our contracts are binding. No one likes price increases and this is our first for contract handsets in our nine years of operation.

“It’s in line with inflation and lower than the price increases from other mobile networks.”

Mr Dyson acknowledges that only a court can provide a definitive judgment on the issue, but urges customers to read his paper,  Third Time Unlucky? The Legal Effect of Three’s Decision to Raise Prices.

In it, he writes: “As so often with consumer contracts, there seems to be a widespread assumption – propagated by companies and accepted by consumers – that the customer services departments of large corporations have the last word on contractual interpretation and on the rights of the consumer. But this is not so.”