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Problem with 7 year telecoms contract with 4Com + equipment lease

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  • Problem with 7 year telecoms contract with 4Com + equipment lease

    I recently bought the shares of a hair salon in Norwich.

    After buying the business I noticed that the existing broadband upload speed was slow and the costs were high. I contacted 4Com, the provider. It transpires that the previous owners signed an agreement for 7 years costing £97 per month for broadband and phone (+ the cost of calls), £50 a month support package and £261 per month to lease the telephone equipment.

    I asked them what it would cost to cancel the agreement and was told it would be a termination fee of £1141.36 for the Network Service agreement, £1852.96 for the Warranty Agreement and BNP Paribas who provided the lease financing have quoted me £7565 to terminate.

    Iíve spoken with the previous owner and she said that she felt pressured by the salesman to sign up for this and her and her husband made an 8 hour round trip down from Norfolk to Dorset to discuss this. She had just taken over the running of the business after her husband was receiving treatment for cancer so was clearly in a vulnerable position. I've got a written statement from her attesting to this.

    I've spoken with BNP Paribas and raised a complaint with them. The total value of the lease agreement with them for 4 phones is £22,174.80 and they inform me the prices of that are set by 4Com. I feel that this amount is completely out of proportion to the value of the equipment supplied.

    At best, what theyíve been sold itís clearly extremely poor value and not at all appropriate for a hair salon. Having since read the reviews online, it seems clear that 4Com pursues unethical sales practices.

    I've made a complaint to 4Com and had this response:

    "Noting your comments, please note that 4Com take any accusation of mis selling very seriously and I have conducted a thorough review and investigation into your account. I am very keen for us to work together and reach a positive outcome.

    I hope you can appreciate that as I was not present at the initial sales meeting, I cannot comment on what was discussed. Our sales representatives must follow a strict scripture and I must trust that all costs are outlined in this meeting.

    Noting your comments regarding the signatory, I cannot see that this has been bought to 4Coms attention previously and the acceptance of services for over 4 years along with the previous sale in 2014 does not support the view that the signatory was unaware of the agreements which were being entered into. It is important for me to highlight that there is an element of due diligence that lies when signing such documents and as they have been signed by Yvonne Garner I would be of the assumption she was aware of the agreements which were being entered into.

    With regards to the value of the Lease Agreement, looking at the specifics of your package, I can confirm that in addition to your system and handsets, it includes our full reporting package, marketing package, as well as 4Com 4sight CTI. Following our appointment and proposal of the order for finance application, the rental/leasing arrangements would be subject to the chosen finance company accepting the value and profile of goods, alongside their standard due diligence of credit checking and KYC checks. This would include a full review of the goods being provided and the financial suitability of the sale. Taking all of this into consideration, I can confirm that the end user pricing would represent the correct costs associated with the order.

    With all the above considered, to define our business practice in the manner you have is not correct and I would respectfully refute the allegations you have made regarding mis selling.

    I am sorry to hear that the agreements have caused a concern for you however at this time I do stand by the agreements that are currently in place. If you do have further concerns please do know I want to assist where I can so please do not hesitate to contact me."

    Ideally I would like to terminate the contract and lease agreement in its entirety. I've attached the original signed contract here and would be very grateful for any guidance of how to respond to 4Com and whether I have any other recourse.
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  • #2
    Just to clarify - you have bought a limited company that owned and ran a hair salon in Norwich, and it is that limited company that is the customer of 4Com?

    As this would be a "business to business" contract (as opposed to a consumer contract) I'm not sure that any rules about mis-selling would apply - but I'm no expert in this area. With business to business contracts the law basically takes the view that both parties are on an equal footing and enter into any agreements with eyes open, and don't need to have their hands held in the shape of consumer protection.

    When you bought the business did you not seek any professional advice from a solicitor and/or an accountant? Did they not spot - or did you not spot - how onerous this contract was? Presumably you saw the salon's accounts before deciding to buy it and agreeing a price?


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