Can You Escape that Phone Contract?

by Brandon Ackroyd - , Last Updated on September 8, 2015, How To Guides

Mobile contracts can be pretty lengthy, not to mention expensive if you find out that you’re not using the services that you signed up for, or even that you don’t have good reception. But once you’ve signed that contract, can you escape? The answer to that question is obviously yes, however, it might cost you a pretty penny. We’re taking a look at breaking mobile contracts to find out if you can wriggle out of that agreement…

The Time Clause

Alrighty, the good news is that if you’ve got a new contract, then you should be in the clear. An extension of the Consumer Credit Act and the Consumer Contracts Regulations both give you a fourteen day cooling off period for signing mobile contracts. That period starts on the day you signed the contract, or in the case of online or over the phone deals on the day that the agreement was made. If you come to your senses early, then cancelling within fourteen days is penalty free. Just make sure that you cancel in writing (a follow up email or letter after calling customer service is fine), so that you have a record of the cancellation and the date that it was made. Simples.

The Service Clause

So, you’re more than fourteen days into your contract and still want to get out? How is your service? Some, though not all, mobile operators include a network guarantee in their contracts. If yours does (you’ll need to read through that contract to find out) and you can prove that you’re NOT getting good reception then you might be able to escape. This can be tough to prove though, so be prepared to fight.

In terms of not getting reception or even moving house to an area not covered by your current operator, you actually have very few rights just at the moment. If there’s no network guarantee in your contract then you depend on the goodwill of the operator to let you out of the agreement. Some will, some won’t. OFCOM (the telecommunications regulator in the UK) is apparently working out a deal with operators on exactly this issue, but it’s unclear right now what that’s going to mean for you.

In summary, there’s a small chance that you can escape from your contract due to poor service, but it’s not particularly likely. You’re welcome to give it a shot, but make sure you keep a record of all interactions with your operator so that you have proof of what has and has not been done.

The Payment Clause

When it comes to money, there are two possibilities here. If your mobile operator increases prices on your contract whilst your contract is still valid then by law you have the right to cancel that contract without penalty. Good news, right? However, few operators are foolish enough to do this, increasing prices on new contracts and waiting for you to sign up again instead…

What about if your contract is too expensive? If you find that you’re having financial problems and you can’t meet your mobile payments then unfortunately the law is not on your side. However, in our experience, mobile operators do tend to be pretty understanding about these things, and most are happy to downgrade you to a smaller and cheaper plan, rather than risk you not paying anything at all. You’ll need to call customer service and see if they can help you, keeping records as you go of course, but you’ll probably find that your operator will be willing to work with you on some kind of financial solution.

Other Options

In some cases a rival mobile operator will buy out your contract for you. So rather than you paying your penalty fees, your new operator will pay them, allowing you to sign a new contract with them instead. This is much more common in the US than it is here, though occasionally UK operators do it, generally as a special offer. There can be limits to this though, with most offers only valid for contracts that are for less than a year, for example.

Buy it Out

Finally, if all else fails then you can buy yourself out of a phone contract, thought this has the potential to be very pricey, depending on your contract and how much longer it has to run. To end a mobile contract early you will be subject to penalty fees, and these add up fast. They vary a little by operator, but are generally calculated in much the same way.

Firstly, you’ll be penalised a sum for each month left remaining in the contract. For example, if you’ve got a two year contract and you’ve only been with the company for six months, you’ll pay the penalty fee multiplied by eighteen, for the eighteen months still left to run in the contract.

Secondly, you may also have to pay for any devices that you received. If you got a phone with your contract then you’ll need to pay the remaining balance left on that hand set (remember, even if the phone was “free” it wasn’t really free, you’re paying for it by adding a little extra to your phone bill each month).

Obviously, if your contract still has a way to go, then this is a pretty expensive option. It’s generally best NOT to buy out a contract unless it’s got less than three months left to run, since any fees you pay will more than offset the financial advantages to switching to a new operator or a new contract.

And there you have it. Yes, it is possible to escape from a mobile phone contract, though how much it will cost you will depend on your circumstances. Of course, the best bet is not to get involved in a contract that you’re not sure about in the first place! Consider your mobile options carefully before signing, and hopefully you won’t have this problem to deal with.