Contracts can be painful; to understand, to agree on and eventually to sign – not to mention how hard it is to get out of them! Nevertheless, contracts make the world go round, so we endure them, however inconvenient they are. You can’t rent or buy property without a contract, you can’t sign up to most gyms without one and you probably won’t get a job without one! So contracts have their advantages too, but what do you do if you need to get out of one? In a country where network contracts are generally easy to obtain, one of the most common types of contracts that people need or want to get out of is their cell phone contracts.
Cellphone contracts are normally 24 months long and are based on a debit order basis, so it’s a long time to wait for it to expire! Contracts like this are called fixed term contracts and thanks to recent legislation are now much easier to cancel than in the past. The CPA (Consumer Protection Act) sets out to protect consumers against harmful contracts which bind them to harsh payments and incurred by demanding and restrictive contracts. Based on the CPA, consumers are now entitled to cancel fixed term contracts and providers must comply within 20 days of notice from consumers. However, it is important to note that cancellation does not free you from any fees outstanding prior to cancellation and providers are still permitted to charge early cancellation fees. Although it may not seem like much, when compared with previous legislation, cancelling a contract under the CPA is much easier than before.
If you want to cancel your contract, you will need to give 20 days’ notice as stipulated in the CPA. It’s best to do this in writing so you have proof of cancellation for reference in the future. Once you receive confirmation of receipt from their side, you will need to make allowances for fees incurred prior to cancellation and then the supplier must refund you any amount paid due, less cancellation fees. As per the CPA, cancellation fees should not exceed 10% of the amount you would have paid over the fixed term.
Although the CPA makes it possible for consumers to cancel contracts early, as you can see, it’s not as easy as all that and doesn’t really pay off. If your contract is near its expiry date anyway, it’s probably better to just wait it out rather than pay the penalty. If you are only at the start of your contract however, then you’d better cancel it and get out while you can!
At the end of the day, prevention is better than cure – so don’t get into a contract if you aren’t sure you can handle it! Never be afraid to take your time to consider all of your options and always ask for everything to be clearly explained to you. Current legislation dictates that networks are obliged to ensure that every customer fully understands every part of a contract prior to signature, so take advantage and get all the information you need up front! On that note, if you have signed a contract that wasn’t explained to you, and you can prove it, then you can probably get out of the contract on that basis – just make sure that you have your facts straight!
If you aren’t yet sure about a contract, perhaps it’s a good idea to get a pay as you go phone, so you can get an idea of what type of contract you need before you commit to anything too serious. Once you have a clear indication, then you will be well on your way to finding a contract that will suit both your budget and your needs.