Costly contract adds up with no mobile phone

Retailers should make good any consumer goods problems that occur within two years

When you buy something under a contract, you'd expect it to last for the whole length of time you've signed up for. But that's not the case with mobile phones, as several Independent readers have discovered to their cost.

With manufacturers' warranties lasting just a year, if an iPhone or Android phone breaks in the 13th month people end up stuck on a contract they can't escape from with a phone that doesn't work.

The latest to fall foul of what appears to be a ludicrous gap in the law is Rose of London (not her real name) who bought an iPhone4S from a branch of Carphone Warehouse in March on a two-year 02 contract costing £35 a month.

"The Wi-Fi stopped working this month, which meant I couldn't access the internet or do any of the things I expected to use the device for," she said. "But when I took it back to the branch, I was told there was nothing they could do because it was a few days after the expiry of the warranty.

"Instead, they just told me it would cost £146 to have the phone repaired. They essentially said I would have to pay that or pay out almost £400 for the remainder of my contract with a virtually useless phone."

Rose is a lawyer, so decided to check her rights. She discovered that a recent EU directive– 1999/44/EC – says all EU countries have to ensure a retailer can be held liable for all "non-conformities" that manifest within two years from delivery.

It states: "A two-year guarantee applies for the sale of all consumer goods everywhere in the EU." That suggests that if something you bought breaks within two years, the retailer should replace it. We already have protection under the Sale of Goods Act 1979 which says goods must be 'of satisfactory quality', and 'fit for purpose'.

However, after six months the onus is on the consumer to show the item they bought failed as a result of a manufacturing fault. And it's this six months' rule that Carphone Warehouse always appears to fall back on.

"They tried to tell me what the law is, which made me really angry," says Rose. "My reading of it is that the EU directive has extended consumers' protection to two years, but that the law is yet to be tested."

When we contacted Carphone Warehouse, the firm agreed to cover the cost of repairing the handset. It told us: "We are sorry to hear that your reader was disappointed with her experience, and as a gesture of goodwill, we have arranged to take a look at the handset with a view to repairing it outside its warranty period."

It's not the first time the firm has adopted that tack when challenged by the Independent. Several readers have turned to our Questions of Cash column for help with the same problem and ended with the same outcome.

In May 2010, MS of Surrey had a useless two-year £25-a-month contract for a broken laptop with a dongle. In May 2012, NS of Edinburgh complained of being stuck in an 18-month O2 contract with a broken iPhone4.

In both cases, Carphone Warehouse offered "gestures of goodwill" to help put the fed-up customers back into the position they would have been if the phone or laptop hadn't developed a fault.

But it shouldn't take the involvement of a national newspaper to make firms treat customers fairly. It seems simple logic that if you take out a contract for a certain period, then it should only be enforced if you can still use it. If a device breaks, then the contract is useless and should be torn up.

But if shops continue to cave in when pressed, the EU directive – which came into force in 2011 – may never be tested. Which could be bad news for those who accept what shops tell them about their rights.