Small businesses tell about crippled costs of telecom services

Thousands of small businesses in the UK are being charged “grossly inflated” prices to rent phone equipment on long finance deals due to the “immoral” sales practices used by various companies, experts have explained the BBC investigation. Some business owners say that expensive contracts are leaving them on the verge of collapse.

The business of Gary Pride has survived the uncertainty of a recession, a fire and the Kovid epidemic. But except for VAT, he is paying only five phones and related software to rent more than 10 years, leaving him, leaving his business on the verge of £ 54,432.

He says that by signing his phone contract, “his life has been ruined”, saying: “I am not paying myself so that I can pay that bill, every month.”

Mr. Pride, who has run his graphic design business for 19 years, says that financial stress has affected his mental health.

Talking to his workshop in Bradford, while breaking in tears, Mr. Pride says that his sleep has been affected and he is taking antidepressants.

“I think I have disappointed myself and I have let all my employees go down,” they say.

Mr. Pride first signed with Telecom Company 4Com in 2017.

The contract he signed was a seven -year finance deal with a separate company to rent 4 -year -old Hihi phones and software.

He says that the actual cost of his contract was revealed only after a two -year “introductory offer” and his monthly bills increased to more than £ 2005 per month per month to more than £ 550 per month.

The contracts viewed by the BBC, state that they are a “universal fare agreement” and the customer will “bill separately for the system rental by the third party funder. However, Mr. Pride claims that he was not built orally and was not fully aware of the finance deal at the time of signing, and the total cost for his business.

“I think I have understood that I have understood,” he says, “no one would have signed this planet” did they know the real boundary of the contract.

He complained to 4Com and gave an opportunity to upgrade his phone and get a “loyalty exemption” on signing a new contract.

He says that he had “no choice but to be with him to keep his monthly payment low”.

His new seven -year contract included another finance deal for advanced phones, but he still had to pay for the initial agreement – bringing the total amount of finance paid in 10 years to more than £ 54,000.

This money is outstanding for the finance company, is at the top of the extra fee, it will have to pay 4com for services such as maintenance and broadband.

This is the amount of wealth, it is becoming difficult to accept Shri pride.

He said, “I can get a top-off-rang range rover for whatever I have paid for him,” he says: “I just feel stupid.”

Mr. Pride says that he cannot afford £ 24,584, which he is cited by the Finance Company so that he can get out of the agreement early.

He is one of the several cases viewed by the BBC, who has signed a second lease agreement in just two years in his long -term contracts.

A former 4Com manager of 4Com, who asked to remain anonymous, told the BBC that it was not uncommon for the company to tie customers into multi-year leases, which appeared to frame 4com as “upgraded”.

He said, “They are not only bursting once, they are bursting again after two or three years and 4com are receiving money from the same deal repeatedly,” he said.

He said that the company based in Bornemouth, which says, had around 17,000 customers across the country, making “hundreds of thousands of one month” of the “gross inflated” deals.

Mr. Pride is one of the over 160 small business owners who contacted BBC A undercover check Last year.

They claim that 20 different telecom companies have made agreements and lease agreements using the same finance firms.

They all claim that the sales pitch was different in a written contract and the sales representatives did not draw their attention to the fact that they would rent equipment on finance and face additional charges. They say they were not given time to read the contracts and were strongly encouraged to sign the spot.

Once he signed, all were tied for five or seven years. Unlike consumer contracts, the UK has no cooling-off period for trade-by-business contracts.

More than half of the people who contacted the BBC were 4com customers running small family businesses with less than 10 employees, and talked about the toll carrying them:

• A woman called the BBC into tears, claiming that she was on the verge of losing her business
• Another said that misleading contracts left them “What are we actually paying”
• In one case, a company was offered exemption on its expiration contract if it agreed to sign a non-discourse agreement

4Com states that it is transparent about its prices and services with customers, and strongly denies the claims that it has increased prices and has been sold incorrectly to customers.

It says that upgrade is not mandatory and that all the amount and upgradation details were presented to Mr. Pride in transparent manner.

A spokesperson says that the BBC shared with the company “historic examples” belongs to less than 1% of its customers.

The BBC secretly filmed the 4COC pitch last year, in which a salesman had orally told customer things that did not match the written contract:

• The salesman said the price of per month would be fixed per month, and only it was accepted that it was not when we were questioned that we were motivated to sign. The contract has shown that after the first year the customer can potentially pay thousands of pounds more in the remaining part of its contract
• He said that any upgrade would mean that the initial contract of the customer would be “erased” – but customers like Mr. Pride, who agreed to upgrade, were paying for their old equipment even after the upgrade was upgraded.
• The salesman told the customer that he was signing the “lease purchase”, but said after five years, the customer would be the owners – but the contract said it was rented.

4Com says its investigation and balance on the sales process, and comprehensive employee training, go beyond general industry practice. The seller we have filmed no longer work for 4com.

The BBC showed several 4com contracts to four independent telecom experts with a comprehensive industry experience.

Although the cost of a HIHI phone is not publicly available, experts believed that customers were inflated in prices – in some cases several times more than the “industry standard”.

He told us that some additional services mentioned by 4com came as a standard with other suppliers and other services were not necessary for small businesses.

He also alleged that the leasing companies were “competent” and “approved the exploitative agreements” at the cost of small businesses.

A specialist, who wanted to be anonymous, stated that seven years of contracts designed “to maximize finance revenue rather than just a valid business requirement”.

Another expert, Johnny Rai, a telecom advisor, who has worked in the industry for 15 years, described prices as “derogatory”, but said “immoral” practices “had been running for more than a decade” as he was “not surprised”.

4Com told the BBC that it offers small businesses “Superior Telefony Solutions”, which “gives competitive edge” for a fair price “, and is the loyalty of thousands of customers.

It says that most have “no complaints” about its sales process, but where necessary, he has a “strong track record” to fix issues quickly.

4Com says the price is inappropriate than cheap products because the Hihi phone is of high quality, and its prices include additional services.

But Mr. Rai said that customers were being charged for basic services like call logs, which “come free with any telephone system”.

He said that it was “almost laughing” that he was being “bundled” in a finance agreement and was approved by a finance company.

“This is contrary to transparent,” he said.

“It’s enough misleading to me – let the customer go alone.”

Richard Jackson runs a small agency in Sheffield.

He signed a finance agreement in 2021 through 4com, which charged over £ 20,000 for three phones and software on him.

Although he felt “angry”, “burst” and “stranded”, Mr. Jackson needed a fourth phone.

When he asked for a price, 4com offered to provide four Yelink handsets on a new £ 40,391 seven -year finance deal except VAT.

Experts told the BBC that all four phones could be easily purchased for less than £ 2,000. He said that when the software was taken into consideration, Mr. Jackson was still cited.

Mr. Jackson turned down the proposal and continue to pay his £ 20,000 loan – he says he wants he was spending his “dream bike”, or on full -time member in addition to the staff.

In response, 4com said that he had not found any evidence that Mr. Jackson was wrong or his prices had increased.

Many companies talking to the BBC had raised their complaints with the Sanchar Lokpal, but were not retained.

While the communication Lokpal can look into the service-related complaints such as the wrong sale of phone systems, finance agreements are usually structured as “irregular” commercial leases.

These Financial Conduct come out of the direct supervision of the authority, especially when signed by limited companies.

A spokesman of the government regulator said: “If we see evidence of broad issues, we have shown that we can do and consider taking action.”

The industry bodies representing the Asset Finance Sector, Finance and Legends Association said that its members “want to keep the customer first” and they believe that SME owners have to face daily pressures “.

He said: “It is important that customers also recognize their responsibility to examine the terms of contracts with suppliers to ensure that the agreements will meet their needs.”