Introduction of Cessation Charge

[#1]

This charge got me wondering as to what is the technical difference between a phone line with / without broad band enabled and what effect having unused broadband would be on your phone line?

[#2]

Hi
I have just received an email from plusnet stating that they are retrospective imposing a cancellation charge of twenty pounds (see  below) that everyone will have to pay at some stage.
When this was done by banks on mortgages, I believe it was deemed illegal by the office of fair trading.
I am delighted by my plusnet service, but is there anyone else who thinks that such a retrospective change inappropriate and possible illegal?
James

This email is to let you know about a small change to the terms and conditions of your broadband service.
Our supplier, BT Wholesale, has introduced a cancellation charge which applies if you stop or ‘cease’ your broadband service. This may mean you'd get charged if you cancelled your broadband with us. Examples of where the charge is payable can include moving house, or changing supplier. From the 29th October 2008, if you cancel your broadband service, there will now be a £20 fee payable.
Please note: this fee will NOT apply if you migrate to another provider using a MAC key - only if you decide to cease your service altogether.
=Where to find these changes=
If you signed up between Thursday 25th August 2005 and Tuesday 10th April 2007 you'll find this is described at point 13.11 in the terms and conditions. If you signed up before this date, you'll find it at section 10.8.
The amendment will read as follows:
“You agree to pay any costs incurred by us due to the cessation of your broadband service (either when cancelling your service or as a result of a house move where a cessation and new provision of service is required) or cessation of the telephone line over which broadband service is provided. Full details of the charges can be found here: http://www.plus.net/support/customer_service/billing/cessation_charges.shtml
This change will not affect your service from Plusnet and you do not need to do anything, we just wanted to inform you of the changes that we have to make.

Kind regards,
Carol Axe
Customer Support Director, Plusnet
Moderators note by James_G : Merged topic into ongoing topic.

[#3]

I wouldn't think its illegal, as the increased charge has been forced on them - they also allow everybody to leave within 30 days without any additional penalty.

[#4]

In what way is it a retrospective charge?  They're not going after those who have already left and asking them to pay it.
They have given you 30 days notice of a change of terms to your contract, which is what the law requires.  If you don't like the new terms you are free to leave PN in that time without being held to any contractual obligations.  If you stay, you are deemed to have accepted the changes and a charge will be levied if you cease your ADSL.
(Note that, as in the e-mail, a cease does not mean migration to another provider.  It's only if ADSL is completely removed from your line.  The one exception is if you move to a cable operator.  In this case BT will cease IPStream on your line and the cable operator will provide their service via their own infrastructure).
Edit: Correction of post.

[#5]

It will also not effect everyone.  Only those wanting to cease their broadband.  Some will stay with Plusnet and some will migrate to other providers, neither of these actions will incure this charge.
What would you suggest Plusnet do?  From earlier in the month Plusnet (along with all other providers) get charged this amount to cease a line from BT Wholesale.  I can only think of 3 options open to Plusnet.  1) Absorb the cost.  This will eat into profits, money available to work on the network, maybe even take them out of business if there was enough ceases taking place.  2) Increase everyone's subscription to pay for those that require a cease 3) Pass this charge on to the customers.
Phil

[#6]

I've just had an email telling me that we will be charged £20 for cancelling a connection. You have all either had this email or you will be getting it soon. What is being proposed is unclear and here is a copy of the question I have sent to Plus Net. I would be interested in the comments of others:
"I've just read your email about the £20 'cancellation charge' being imposed by BT (of which I believe you are now part although you don't say so), and I think it needs a great deal of clarification. You point out that if a customer is migrating to another provided, requesting their MAC number to do so, the charge does not apply. However, it is not at all clear whether or not the charge applies if a contract is simply not renewed. You must clarify this because as it stands it seems likely that it would be charged under those circumstances e.g. if a customer were moving abroad and no longer wanted a broadband connection in the UK, he or she would have to pay BT £20 even though they were no longer under contract. That surely can't be right and I'm sure Ofcom would be very interest and would need to make a ruling on the matter. It would be daylight robbery to be charged even after  the contract had ceased and more to the point illegal. Please clarify and confirm that the charge is only payable if I am NOT migrating and am cancelling a contract before it comes to an end."
What do you guys think?

Moderators note by James_G : Merged into ongoing discussion.

[#7]

I concur with ‘pfgpowell’ comments………the email makes frequent reference to word variations of cancel/cancellation, however if you decide not to renew your contract at the end of your contractual time then your contract has ‘lapsed’ and not canceled……….my understanding would be that the charge would not be applied…..however PlusNet will need to clarify that point otherwise it just becomes a levy on all of us!!!!!
Now….. that is not good!!
K

[#8]

I'm incensed.
I can understand that PlusNet can't absorb the cost of the cancellation if they have a high churn of people switching providers. But there should be some consideration given to customers who aren't switching regularly.
I would have expected a sensible approach would be to apply the cancellation charge within, say, the first two years of a contract. After that (or more), I would expect Plus.Net to have made enough money from the contact to be able to absorb the charge.
If PlusNet can absorb the startup charge, then they can absorb the cancellation charge - they just need to work out what term of contract they need to cover the cost.

[#9]

This got me thinking banks and building society made a profit on bank charges i.e. bounced direct debit because you went in the red by 2p yet they levy a £20 fee for a letter and £10 fee for every cheque you wrote so you end up with a bill for £30.
Are BT/Plusnet making a profit on these charges?  Could we have a break down on these charges please engineer time computer time and staff time etc?
Until this is done I will not accept these changes.
In addition are broadband PAYG customers hit with these charges?
Puddy
ps seems a bit strange its £20 exactly

[#10]

@ Geezer
That's right, you wouldn't need to pay the cease charge if you took a deferred house move contract with us.

[#11]

Quote from: pfgpowell

I've just read your email about the £20 'cancellation charge' being imposed by BT (of which I believe you are now part although you don't say so)

Just to make things clear, the charge is levied by BT Wholesale, not BT Retail. It's a universal change in pricing that other IPStream based ISP's are *all* being charged. The following is an excerpt that BT Wholesale (who we are *not* part of) send to all ISP's that use them...

Quote from: BT

New Cease Charge From 8th September 2008, the cease price will change from £4.90 (ex. VAT) to £15.75 (ex VAT) for Datastream, IPstream, IPstream Connect, and Wholesale Broadband Connect. This change will apply to all end user access ceases which are closed and completed (customer completion date) from that date. The new BT Wholesale price is based on the following assumptions: i) we estimate that 50% of lines will be re-used without any jumper recovery charge to BT Wholesale. This includes both re-use by BT Wholesale, and reuse by other LLU customers of Openreach. ii) of the remaining 50% of lines where the line is not re-used we expect over time to recover 50% through the bulk recovery process and 50% through singleton recovery. This includes a. where the end user decides they do not require broadband any more b. where the end user switches to cable c. where a house move occurs where the incoming occupier does not wish to purchase ADSL based broadband. These estimates are built up from both market share data and a view of planned port management processes, and we expect them to be close to the actual rates. We are aiming to keep to the policy of reflecting Openreach input costs and plan to review these assumptions in the period January – March 2009 and will adjust prices accordingly if necessary.

Quote

I think it needs a great deal of clarification. You point out that if a customer is migrating to another provided, requesting their MAC number to do so, the charge does not apply.

No, in most cases it wont elicit a charge.

Quote

However, it is not at all clear whether or not the charge applies if a contract is simply not renewed. You must clarify this because as it stands it seems likely that it would be charged under those circumstances e.g. if a customer were moving abroad and no longer wanted a broadband connection in the UK, he or she would have to pay BT £20 even though they were no longer under contract.

That's my understanding.

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That surely can't be right and I'm sure Ofcom would be very interest and would need to make a ruling on the matter. It would be daylight robbery to be charged even after  the contract had ceased and more to the point illegal.

Ofcom will be fully aware of the pricing change. I'm pretty sure BT Wholesale will have had to run the proposed priving changes past them before they implemented them.

[#12]

Quote from: axisofevil

If I were to (hypothetically) downgrade my account to dial-up PAYG, would there be any liability for a cease charge?

Yes, there would be a cease order, so a £20 charge would be raised.

[#13]

Quote from: Spider

This charge got me wondering as to what is the technical difference between a phone line with / without broad band enabled and what effect having unused broadband would be on your phone line?

If you had unused broadband on your telephone line and you didn't have the appropriate filters, you might well notice an amount of crackling on your telephone calls.

[#14]

1.    What is the charge being levied by BT? Is it also £17.02 as you are charging us, or are you adding in some "extra" charges? Looking at other forums from other ISPs, it seems it may be £5 + VAT.
2.    If BT need to do some work to "cease" a line, then one way or another that needs to be paid. Either by BT including the costs in the setup costs originally charged, or by them charging the ISPs when the "cease" is requested. The ISPs in turn then need to pass that charge on either indirectly  (e.g. in setup costs or monthly charges), or directly when the customer requests something that means BT will have to do the work. All that means that a charge will ultimately be bourne by the customer. However, is the charge by BT "reasonable" for the work involved? Do they have to send an engineer to some box somewhere to physically unplug a cable, or is it just setting some flag in a database? The legal ruling against the banks was because the charges were deemed unreasonable.

[#15]

@ Jcmoon
Bear in mind that we're just passing on a charge that we are being charged by our Wholesaler.
It'll have gone through BT Legal so it's very unlikely that there would be any legal repurcussions.