Charities Being Ripped Off

All industries unfortunately attract suppliers that shall we say are less than scrupulous.  The telecoms industry is no different, it is especially frustrating when there is plenty of money to be made without resorting to dubious practices or taking advantage of the lack of knowledge most people have.

We have seen a number examples within the charities and voluntary sectors where all those practicing deception are using a similar strategy.  It is particularly upsetting as they taking money away from a deserving cause.   We recently helped one charity to the extent that the chief executive said the following :

“Don’t even think about doing anything with your phone systems without talking to Dave first. He’s saved our telecoms bacon twice now – sees through the sales bluster of the cowboys, understands the small print that the rest of us don’t and knows the market and the contexts (legal, ethical etc,) Highly recommended.”

So what led to this situation.  The standard approach is we can give you a free new system or there is EU/Government money available.  There is then a cost comparison which has no real details of actual costs or details of what is actually being supplied.

We have attached the proposal YoungActors and follow up information Young Actors Job Costings that was sent to the customer.  So in this instance you can make your own minds up.  It could be a rogue salesperson or the standard company approach.   In either case in our view it was full of inaccuracies.  Below we have also included the text of the email we drafted for the charity when the supplier asked for £3,000 just to cancel the deal even though no services had been provided.  Since our email almost two months was sent there has been no word from the supplier.   So was the cancellation fee a try on or did they realise they had been found out.  If you go the end of the blog we name the supplier.   We would love to hear of more examples so we can try and clean up the industry a bit.

Dear xxx

 Thank your for the breakdown of the costs and additional information. It confirms the fact that we were mislead in the sales process which I will detail below.

Call Savings

You have stated that your call rates are 0.9p UK national and 6.9p UK mobile. Your proposal document states that the bill for calls with you versus our existing supplier would be £69.75 instead of £120 ie a saving of 41%. Our current call rates are 0.95p and 6.9p respectively, so you could not be delivering that amount of savings

Line Rentals

You have stated your pricing of £172.50 per quarter is for 4 ISDN 2 channels and 1 analogue line. We currently have 6 ISDN 2 channels and 2 analogue lines. So you have not compared like with like. Whilst your prices are slightly lower than we currently pay it would only save us £22.25 per quarter and not £127.50 you claim in your proposal.

Adjusting your proposal with these figures it actually means rather than saving £13.41 it would cost us approximately £135 per quarter more. The proposal forms part of the contractual process and the inducement was to save us money which obviously this will not. Our advice is that the contract is therefore null and void as it was based on misleading and incorrect information.

In addition

Outstanding payments

You indicate you have included 2,000 to pay off our existing lease and penalty clauses. We currently still owe £2,400 and would incur £550 pounds in cancellation fees. We would therefore have to pay £950 of our own money when your proposition was we would have nothing to pay. This further increases our losses on your deals.

Equipment Prices

It is obvious that you have vastly inflated the equipment prices which is actually a false representation to the leasing company as the amount advanced is not covered by the value of the assets.

In a couple minutes we found the following comparable prices for the handsets .

http://www.exteradirect.co.uk/product/siemens/openstage-15-hfa-telephone/2391/?utm_source=google&utm_medium=products&utm_campaign=froogle&gclid=CPqNlNiO9bYCFYJV3god_S4Asw Here they cost £87 each versus the £201.61 you quoted. This is an excessive markup

Also the advice we have been given is that the Siemens 3550 is aimed at 20 – 50 users and we should have been recommended the Siemens 3350 which is more appropriate for the size of company we are. This is also illustrated on an alternative suppliers website http://www.mfcomm.co.uk/products/siemens/hipath-3500-3300/?gclid=CLeeroGM9bYCFQm33godgUYAzQ. So in effect your advice was also negligent. Additionally Your pricing again only has capacity for 4 ISDNs when we have 6, this would further inflate your costs by £327.48 at your prices to give us a solution comparable to what we currently have.

Also we understand that some of the products you are suggesting supplying are already end of life http://www.mfcomm.co.uk/products/siemens/hipath-3550-3350/387/stls2/ and http://www.mfcomm.co.uk/products/siemens/hipath-3550-3350/386/slu8/ So effectively you were proposing an obsolete system rather than a new one.

Recorded Announcements

At no time during any meeting was recorded announcements discussed. As an actors theatre we have own access to professional recording artists and would be able to source this ourselves. It has been added to the contract unrequested. Also we know that also £1,000 is probably 3 – 4 times the marketprice for a simple recording. You have also included this in lease presumably yet it has no value to anyone else should we shut down and the leasing company sort to recover the assests

Line Transfer Costs

Nowhere in the proposal was it highlighted that this was a chargeable activity and having spoken to our existing supplier they have indicated that it is very unusual within the industry to make this charge. My suspicion is that you are trying to bolster the numbers. But in any event you have only transferred 4 channels when we have 6. You are indicating that these and the install costs are also included in the lease

In summary even ignoring the inflated prices. Correcting your proposal to accurately reflect what we currently have and the falsified call savings over 5 years your proposal would cost us an extra £3,975 over the 5 years.

We signed the contract on the basis of the proposal which is incorrect and therefore it is invalid.  Also your contract may state what the penalties but they do not comply with ofcom guidelines. As part of the credit legislation you are obliged to start the rate of interest on any paperwork which your have failed to do so. Your interest rate calculation is simply taking the interest amount and spreading it over five years. We will infact be repaying the capital throughout the five year term and interest should only be charged on the outstanding balance. By my rough calculation the actual interest rate is 7.4% on this basis.

We consider this the end of the matter. Should you continue to pursue the matter we shall report you to Trading Standards who have successfully prosecuted companies undertaking similar approaches as yours. We will also advise Ofcom and the Telecoms Ombudsman and finally we will ask the Charities commission to circulate details to all other charities.

 

Well as said that seemed to work.  There was no further attempt to ask for the £3,000 nor even a reply to challenge the email.

The supplier was Supply Communications in Romsey Hampshire and the emails on which we based our response were from their sales manager.  Everything in this blog is taken from emails between them and the charity.  You make up your own minds.