Undercover filming of a sales pitch by a Hii Com representative
A secret investigation into allegations of phone contract mis-selling has exposed questionable sales practices, sparking calls for tougher regulation. The BBC spoke to 12 small businesses who say they were misled.
“I feel bad every time I think about it,” says Paul Toplass.
“I've been in business for over 25 years. We've never experienced anything like this.”
Mr Toplass, who runs a pest control business, claims he was misled into signing a commercial contract for three phones from which he is now “powerless” to free himself.
This left him “having to pay over £10,000” for the phones which he says are worth less than £200 each.
Secret filming of a pitch by a representative of Hii Communications Ltd showed them making verbal promises that did not accurately reflect the terms of the contract and failing to highlight clauses regarding third-party financing and additional fees.
The Lincoln-based company, also known as Hii Com, said it was working within “the guidelines and rules set out by our backers”.
Provided
Paul Toplass with one of the phones he signed up for
Mr Toplass, from Nottingham, claimed he was not informed of important facts about the contract he signed in February 2023.
He said he was thinking of signing a two-year contract with Hii Com and did not know he was leasing the phones as part of a financial deal with another company.
He “completely trusted” the seller, but regretted not reading the fine print.
The contract provided that the equipment would be leased by a third party – the financial company Grenke – for 27 quarters.
Mr Toplass discovered he was now owed more than £10,000, to be paid over seven years.
“They never said we were entering into a rental agreement,” he said.
“This is morally wrong on every level. We do business and we are open and transparent with each of our customers. Fixed and upfront prices.
“This company did none of that.”
Hii Com claims more than 3,000 customers.
The BBC secretly filmed a 90-minute sales pitch delivered by a company representative.
During the meeting, a potential customer was told three times that he would only do business with Hii Com. No rental contract was mentioned.
Undercover filming of a sales pitch by a Hii Com representative
He was told he was signing a five-year contract totaling £18,100 and offered a “price promise” setting the cost.
After an hour, the seller asked him to sign a seven-page document.
However, after being informed by the BBC of complaints from other companies, the client began to review the contract in detail.
He found that he anticipated additional costs after the first year and was for a longer duration than envisaged.
When questioned, the seller offered to cross out seven different passages.
They included one detailing an “annual maintenance fee” of £983 after the first year, which the seller said only applied if the customer did not have insurance.
When asked repeatedly why the contract was for 84 months – two years longer than verbally promised – the seller replied that the company would take ownership of the phones after five years and then pay for a “license” during a two-year upgrade period.
'All alone'
While consumer law grants individuals a cooling-off period after signing a contract, there is no such protection for businesses.
Mr Toplass complained to telecommunications regulator Ofcom but was told it did not deal with individual cases.
He then turned to the Communications and Internet Services Arbitration System (CISAS), but was told he was missing evidence such as “photographs of the documents at the time he signed them”.
CISAS concluded that “on the balance of probabilities” he had “accepted contracts of a minimum duration of 84 months”.
Mr Toplass said it was unrealistic to expect people to be able to provide the type of photographic evidence sought.
“You are alone,” he said.
Financial lawyer Arun Chauhan believes Ofcom or financial regulators should investigate further in light of the BBC's findings.
All 12 small businesses interviewed by the BBC said sales representatives failed to draw their attention to the third-party rental agreement or additional fees. Once they signed, they were told they would be bound for seven years.
Showing the undercover footage, financial lawyer Arun Chauhan said: “Whatever is put in writing, you can see how these clients are being told something that they almost trust so much that they don't no real need to read the agreement.
“I know ignorance is no defense under the law, but people come to the contract and think, ‘I was told everything I had to do.’ So they sign it.”
He said he would like to think Ofcom or financial regulators would investigate further in light of the BBC's findings.
Hii Com said: “All our customers are aware from the outset that they are entering into a rental agreement.”
He added that CISAS had also determined that it had “behaved properly and properly” in Mr Toplass’s case.
Grenke said it would conduct a “comprehensive internal review” of its telecommunications portfolio. The company was committed to transparency, but there was “an expectation and obligation that the customer would do their own due diligence.”
Fashion wholesaler Miya Fu says she feels 'betrayed' by Hii Com
Miya Fu, who runs a scarves and accessories business in Manchester, said she agreed to meet Hii Com after a representative told her they were a BT wholesaler – a claim the company also made on its website.
She said she “diligently checked” the contract and it was only when money started flowing out of her bank account that she learned she was bound by a seven-year deal with a funder.
She felt “betrayed” and worried because “you never know what you’re going to pay” each month.
BT said Hii Com was not an accredited partner of BT Wholesale for fixed broadband products and services, and it was “concerned to hear about the examples raised by the BBC”.
“Soul Search”
Dave Millett, an independent telecommunications adviser, said few people knew CISAS was funded by the industry itself and there was “no obligation on any provider” to sign up.
He called for “a truly independent mediator”.
CISAS said the complaints were “carefully assessed by a trained and legally qualified independent adjudicator”. Businesses unhappy with the findings could reject them and take action against a supplier in county courts.
The Financial Conduct Authority said its regulatory powers did not give it the authority to investigate the concerns highlighted.
For Mr Topless, the experience led to “moments of introspection”.
“How did I end up in this position, how did I put the company in this position?” he said.
“You do business every day and you have trust. It's about trust with the person sitting across from you.
“Months and weeks later, finding out you've been cheated on is not a good feeling.”
If you would like to get in touch with your own experiences of sales techniques in the telecoms sector, good or bad, please email [email protected] – quoting a contact number if you would like talk to a journalist.
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