[3GScottishUser]

From Mobile Today (18/01/2007):

3's new policy of charging customers £25 to downgrade their tariff has created a wave of complaints from customers, prompting Phones 4u to post a sign in every store about the fee.

Dealers and retailers said they have been inundated with irate customers who were promised to be able to downgrade tariffs during their contract. 3 made the move to protect itself from sales made with downgrading in mind.

One Phones 4u salesman said: 'It's causing a great deal of problems because we were telling customers they could downgrade and it's no hassle at all and then 3 are making us sound like clowns because we can't downgrade them now without charging them £25.'

One independent dealer added: 'Customers are saying that we have given them misleading communication. It's really, really affecting our business.'

The changes have turned many salespeople off selling 3. A Phones 4u salesman told Mobile: 'It was one of our biggest selling networks. It's not anymore because of all the changes in their downward migration policy.'

Despite the issues, the notice in Phones 4u stores has helped, according to staff. 'If a customer sees it in black and white on the wall, they are less likely to get angry at us.' The sign informs the customer of the changes and apologises for any inconvenience caused.

http://www.mobiletoday.co.uk/content/15557.asp?men=1&sub=2

[Ben]

Oh dear. Well, I'm glad this sales practice is being taken care of. Of course, if Three had applied the charge to the dealer rather than the customer it could have escaped the wave of angry customers it has created. Not that the dealers would have taken kindly to it...

[3GScottishUser]

Yep... 3 seem to have found the perfect solution to not only annoy customers but to turn just about every sales person in multiples and the independent sector against them. It's no wonder an announcment has been made that Marketing Director Graeme Oxby has been replaced.

Poor 3 UK, they just seem to be stumbling from one disaster to the next and from where I'm sitting looking at the massive reduction in connections (see separate thread), I just cant imagine anything other than HWL getting out. Commonsense dictates that 3's own stores (70 or so) will in no way be able to compensate for the connections that 900 CPW and Phones4U stores managed. Their website has a low hits ratio and the loss of CPW and e2save as active partners must also have a huge negative effect. Overall the UK business must be shrinking at a significant rate.

[Hands0n]

Hang on a cotton pickin minute! 3 are not entirely the guilty party in this. The fault is all down to the dealers who sold in a rather dishonest manner. They would get their full credit for the sale, the customer would get their six-month or whatever discount, and 3 would stand the intial loss on the basis that when the contract went to full price there would be something in it for them.

The dealers queered all that up by encouraging downgrading as part of their marketing and sales ploy to the Customer, who readily accepted the "deal".

In due course 3 gets absolutely nothing out of the deal at all, except the liability of a discounted contract that has been downgraded to cause them no profit at all.

I simply fail to see why 3 should be expected to stand such a loss. It is not, after all, their fault that the dealers exploited what turns out to be a contractual loophole. Everybody gains but the network company? That is grossly unfair and no business could or would tolerat such.

I do think it quite reasonable for the Customer to go after the original dealer who sold them the pup in the first place. If I were 3 I would make more of it in the media, directing the "offended" Customer to their dealer for remedy. Now that, in my opinion, would be entirely fair. If the dealer had any scruples (fat chance) they'd stump up the £25 out of the profit they made from the original deal to keep their Customer sweet.

As far as I can see, this is not a 3 issue but one caused and entirely owned by the dealers themselves.

Noone can be expected to do business and survive under such circumstances as 3 are being placed under in this specific instance!

[3GScottishUser]

I have to disagree. The dealers were simply advising customers what the rules were and 3 wrote those rules. It's another example of 3 taking action to prevent something they themselves created, similar to the 'poor qulaity customers' claim when they knew full well that dealers were literally giving away contracts with little prospect of additional revenues or retention!!

Changing terms retrospectively appears to have been a very silly move that appears to have compounded the problem rather than applying changes to new accounts only which would have allowed current customers to do as they had been advised without penalty. 3's action appears to have been a close the stable door after the horse has bolted and I'm pretty positive 3 themselves have known for a long time how dealers have been closing sales. Being cynical perhaps it's in 3's interest now with their direct strategy to create mistrust between the dealers and their customers?

What this adds up to is a shambles and the course of action 3 have taken has not endeered them to either customers or their dealers both of whom simply followed the rules at the time and have now seen the goalposts moved. Not a very honourable trading policy for a multinational like HWL who should know that swallowing the cost of previous errors is far better than penalising customers and dealers in the longer term, then again perhaps the longer term is'nt an issue now.

[Hands0n]

But, precisely the same thing could happen if the dealers suddenly focussed on, say, Vodfone and sold contracts to Customers with the "guidance" of downgrading after the initial term. No mobile network operator would stand for that.

These may well be 3's own rules and those may have been naturally exploited by those in the know or with intent. But the vast majority of Customer would have been content with the deal at face value. All it took was for the Dealers to exploit these rules for their own gain, the Customer was merely the pawn in all of this. The blame lies firmly at the feet of the Dealers, in my strongest opinion. They behaved thoroughly disrepsectfully.

I know you're not entirely endeared to 3, and they have not done me any favours either, but in all fairness they did not do much else in terms of T&Cs that the other mobile ops do. All it took was for an exploitative Dealer network to effectively tear the golden goose to shreds, and now it has all gone horribly wrong. The Dealers, meanwhile, move on leaving in their wake the wounded 3.

As for retrospective charges - I think we are all faced with other examples of such retrospectiveness. Take, for example, our supposedly future Prime Minister who has recently imposed a retrospective tax on all air travel. Some airlines who cannot sustain the hit are passing it on to the Customer. Other airlines and travel companies who can are absorbing the hit from their own [substantial] coffers. Do we see one single Dealer doing this in the case of 3? Quite! How very revealing of their own attitude not only to the very network/s that they live off but also the Customer whom they care not a jot about. We are, to them, only fattened cows to be milked for all we're worth. A classic reason I will not deal with any of them, favouring going direct or to the store (not franchise) to whichever mobile network operator I choose to do my business with.

The Dealer network is not to be trusted - see how they shambolically handled Cashbacks on all the networks? The Customer was often treated like a pariah, the same Customer who was financing the Dealership. It is a wonder that the DTI did not investigate them all!!

[3GScottishUser]

I agree to some extent but 3 UK like every other business knew what their terms allowed and I'm sure their staff and other sampling would have kept them in touch with the antics of the dealers who were tasked to gain them new customers.

The dealers have been riding roughshod and offering contract buy-outs etc. If they are going to that extent it's no surprise they would exploit any networks terms and conditions to close a sale, especially one which produces high value commission! 3 have been caught by their own agenda to sign customers up onto high value contracts. The dealers have delivered but only because they could advise customers they could downgrade, so in effect the lure of big commissions led to mis-selling and 3 have ended up trying to protect their investment. The mistake they have made is to have penalised the folks paying the cash, they have antagonised yet another load of customers who accepted dealer recommendations and now find themselves trapped and many will feel cheated ad will be not only hostile towards the seller but 3 as they changed the terms.

I have no sympathy with the dealers who exploit every angle they can but I have little sympathy for 3 who set out their stall per their own design in the first place. It's 3's agenda that is to blame really as other networks dont appear to be introducing punitive charges for downgrades although some have extended the period new customers have to retain their original deal for and that is fair enough as it affects new contracts only.

ATEOTD it's hard to think of a major company that has made so many gaffs as 3 over the last year or so and it's not surprising that the entire top team has or is in the process of being replaced. One has to wonder if the UK mobile market has any confidence left in 3?

[Hands0n]

For how long would one imagine the Dealers thought they could milk this particular sacred cow? As soon as they started their tricks they laid the bed for 3 to be damaged, possibly terminally.

Okay, some might argue that all is fair in business, and that 3 should have been smarter about things. Perhaps, also, 3 should not have bothered to try and stimulate sales of their product by introducing appealing commissions to the Dealers. But they did, and the greedy Dealers virtually raped the business in the process of stuffing their fat wallets. All with no thought of the symbiotic nature of the business. Without the mobile networks the Dealers would be selling bananas in Chappel Street Market, in London's East End!

Now 3 have clamped down, as have a few other MNOs, and rightly so. The Dealers will no doubt squeal like the proverbial stuck pigs that the MNOs are being unfair to them. One has to ask "Well, how does it feel then?".

Think about the suggestion of the "antagonised" Customers. Who are they antagonised with? The Dealers, no doubt, are blaming 3. But who set the expectation in the first place? Why shouldn't 3 introduce retrospective rulings such as they have? The only ones to be affected are those who will want to downgrade their contracts. But why are they doing so? Were they mis-sold by the Dealers (perish the thought!)?

3 are in between the rock and a hard place - a complete no-win situation. But they have to do something to stem the flow of vital cash resource. They simply cannot afford to stand by idly and go bust in order to honour a "deal" put together by the unscrupulous Dealer networks. And lets face it, the "deal" is with the Dealer, not with 3. It was the Dealer who sold the contract.

In no other business would one go back to the manufacturer or producer, so why should the Customer be directed to 3 for the selling and expectation setting by the Dealer? You buy a telly from Comet, it goes wrong, you take it back to Comet for remedy. But the mobile phone Dealer tries to place himself in a unique and entirely enviable position in the UK, in defiance of statutory trading laws and policies.

Bottom line; the Dealer sold the contract to the Customer claiming that the Customer could downgrade subsequently. The Dealer, I suggest therefore, has negligently made a contract in tort (http://dictionary.reference.com/browse/tort) with the Customer by promising something they could not guarantee [free] delivery of. A risky business, selling something you don't actually own.

The Customer still can downgrade, at a price. The Dealer should have, therefore, provisioned for such a price imposition rather than take advantage of the offer of the day which, as 3's contract says, may be varied at any time.

Expect to see the other mobile network operators following suit with a charge for downgrading within contract life.

[3GScottishUser]

Browsing around today it appears that 3 are back on CPW and e2save's homepages.

It had to happen. 3 just can't ignore the dealer channel regardless of how poor the customers they attract and the offers are the same sort of thing that they did 12 months ago. 9 months free on a 12 month contract with a free Nokia 6233. A new phone and inclusive calls and texts for less than the cost of a PAYG handset. Might appeal to those who can get past the credit scoring and who can pay by Direct Debit.

No doubt CPW will be paid just as much to promote 3's deals as any others, they won't be selling them to make less.

What this latest U-Turn proves is that 3 have been forced to act to stop the contraction of their contract business despite recently telling the press the exact opposite!

So despite the reports there might just be a few contract bargains on 3 from the majors but for how long is anybodys guess.

[3GScottishUser]

Update:

I said I would pass by the 3 Store again and I was in town today about lunchtime again and made a point of checking out the mobile stores in the local mall.

The 3 Store is the first one in the mall and what a pityful sight. Four 'Blackshirts', one at a desk and the other three stood in line at the back of the shop talking to nobody. A school easal with blackboard appears to be out front now but again it's black and white and it's form just might be a bit juvinille to be taken seriously.

Further in It's Vodafone who were pretty busy, Phones4U also busy and T-Mobile who had a couple of browsing customers.

02 are at the end of the mall and I was'nt going that far but they are normally pretty busy.

On the way out pretty much the same story although Phones4U had fewer browsers. 3 Store after 10 minutes still had nobody in the shop. Maybe they got a few enquiries when I was in M&S but I doubt it as I have now passed by 4 times at what is normally a busy shopping time and I have yet to see a single customer in there.

Don't know what it's like elsewhere in the country but I really feel for the 3 Store staff in my local town. It must be a very long boring day for them standing there on their own.