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Case 2 - Universal Utilities (Unicom Telecoms)

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Contract Writer:  Universal Utilities Ltd (Unicom Telecoms)

Original agreement as per contract front page:  Supply of broadband services for 3 years Monthly payments by the client

Resulting charges and unexpected results after 3 years: Unicom didn't remind the client that the contract rollover was due Contract rolled over for an additional 3 years Exhorbitant contract breaking fee applied

• Clause 2.1 Universal Utilities will procure Service to the customer subject to the terms of this Agreement. Universal Utilities, or its principals, may at any time without notice vary the Service for technical, operational or other reasons within its entire discretion.
• Clause 3.3 Interest will be charged on unpaid invoices from the due date until payment at a rate of 1.5% per month or part thereof.
• Clause 3.6 The customer shall not be entitled to delay or withold payment or claim any set off against any payment due hereunder in respect of any claim or complaint, which the customer may have for any reason whatsoever. Any payments made by the customer to Universal Utilities may be applied by Universal Utilities as it deems fit.
• Clause 3.7 In the event of any action taken by Universal Utilities in relation to any charges due from the customer to Universal Utilities whatsoever, the customer shall reimburse and indemnify Universal Utilities, with and in respect of all expenses relative thereto, including all legal charges and professional fees on a full indemnity basis.
• Clause 4.2 (g) The customer untertakes to allow Universal Utilities or its duly appointed agents access to the customer's premises for the purpose of installation, programming and maintenance, or for any other reason whatsoever.
• Clause 6.1 Universal Utilities shall be entitled to suspend Service in order to maintain or improve its network or if obliged to do so by ... omitted as irrelevent, or for any other reason whatsoever.
• Clause 8.1 (a) This Agreement will remain in force - for a minimum Supply Period of three years, and will continue thereafter until terminated, by the customer giving to Universal Utilities not less than 3 months written notice, to expire on any third anniversary of the start of the Supply Period.
• Clause 8.1 (d) This Agreement will remain in force - Until in the event that the average Usage Charges, appertaining to the relevant discount tariff referred to overleaf, is increased in any one calendar year by more than a cumulative total of 10% in the Retail Price Index, and the Customer has given notice to terminate within 14 days of the date of the notice of variation, provided for at clause 3.1.
Clauses 8.1 (b) and (c) relate to termination due to customer breach of the contract or going into liquidation.
• Clause 8.3 In the event of the agreement being terminated pursuant to clause 8.1 (b) or 8.1 (c) above then the customer shall pay to Universal Utilities a termination fee of £100 plus the total amount that would have been payable in respect of the line rental or other select services for the remaining period of the Supply Period, had the Supply Period not been terminated early because of the customer's breach or insolvency, plus thirty percent of the customer's Estimated Monthly Expenditure, as set out overleaf, for each of the remaining months of the Supply Period, that would have occurred had the Supply Period not been terminated early because of the customer's breach or insolvency. The Customer agrees that the termination fee as calculated herein, represents a fair and reasonable estimate of the losses, costs, and expenses, which Universal Utilities would suffer in the event of the agreement being terminated pursuant to clause 8.1 (b) or 8.1 (c).
• Clause 9.5 Universal Utilities may change the terms and conditions of this agreement upon giving 14 days notice.
• Clause 9.9 Any notices given by the Customer under this Agreement shall be made in writing and sent by registered post. Any notices given by Universal Utilities under this agreement shall be made in writing, and sent by post, email or fax.

• Clause 2.1 - A great clause for Universal Utilities. It's a blanket licence to opt out. They are stating here right upfront that they may "vary" their service for any reason whatsoever. The word "vary" could be taken to mean anything including slowing the service to providing no service. "within its entire discretion" simply means that it's entirely up to them whether they do so. This clause would have the exact same meaning if were to read simply "Universal Utilities may at any time without notice vary the Service for any reason within its entire discretion."
• Clause 3.3 - It's a very high interest rate. 18% per annum, when standard mortgage rates are around 6%. Granted that credit card companies charge around 18%, but their loans are not secured. Credit card companies don't have the right to take any of the items a customer bought with their cards before they failed to pay the bill. This clause allows Unicom to charge credit card rates of 18% whilst still retaining ownership of the property.
• Clause 3.6 - Basically the first part of this clause is saying "Unicom are always right and the customer is always wrong. However, in the event that the customer does happen to be right, they must still pay Unicom anyway." Most people know that when dealing with large corporations, it's very difficult to get a resolution to any complaint. The fastest way to get someone at the large corporation to take notice is to withhold a payment. What Unicom are saying here is that the customer may not do that. If they do so they will have breached the terms of the contract. The fact that Unicom has felt a need to include this clause leads one to suspect that they have had many difficulties with regards to customers withholding payments in a bid to get attention to their disputes. This in itself is a warning sign. The second part of Clause 3.6 may appear innocent enough. Usually this clause is so that Unicom may apply a payment to the oldest outstanding invoices first, maybe to a disputed invoice instead of the latest undisputed invoice as directed by a customer. However, by the wording of the clause, Unicom could apply the customer's payment as it deems fit. Doesn't this give Unicom open lisence to apply the payment to the staff Christmas Party if it so desires.
• Clause 3.7 - By signing this contract you are agreeing to pay all Universal Utilities costs if they decide to take legal action. A key point with this clause is that it specifically mentions “moneys due”. If you can prove that Universal Utilities is in error and that they are trying taking legal action in respect of that error (ie, there are no “moneys due”) then you should not have to pay their legal expenses.
• Clause 4.2 - Wow. “For any reason whatsoever”. This all encompassing statement could have Unicom employees entering your premises to have their lunch because it’s hot or raining outside. If they want to come in, you’ve got to let them, no questions asked. You could ask them why they want access to the premises, but it wouldn’t matter what answer they give because the contract allows them to come in no matter what the reason.
• Clause 6.1 - Again, here we have the “for any reason whatsoever” statement. This statement eliminates the need for the preceding list of reasons because it is all encompassing. They might suspend your service because they don’t like the way you spoke to them on the phone. Maybe it’s staff Christmas Party time and they need the plugs that supply your service so they can provide entertainment at the party. Guess what? They are allowed to do it because by signing their contract you are giving them permission.
• Clause 8.1 (a) - Now this is the big catch. You must give written notice to cancel the service and the written notice must be more than 3 months prior to the expiry of the contract. If you miss the opportunity and enter that 2 years and 9 months period, the contract is going to start all over again for another three years. A courteous company would allow the contract to continue on a month by month basis until you cancel, or at least send you a reminder that the period in which you can cancel is about to expire. Most people these days have too many things happening in their lives to be remembering the date that their broadband contract renews, and companies that write contracts with clauses like this know it. Whilst most companies have the resources to remind their customers when a contract is to renew, most customers don’t keep a database of when all their personal contracts are going to renew. Our advice is to never sign a contract with a one sided rollover clause.
• Clause 8.1 (d) - Here’s a slim chance of escape. When they send you a notice of a tariff increase, if the total increases for the year add up to more than 10% above the Retail Price Index, you may cancel the contract. But you must do it within 14 days of the date of the notice. I wonder how long it takes from the date of the notice for you to receive it. Large companies often use mailing houses, and bulk notices can sometimes take weeks to get to the recipient. Universal Utilities also buys themselves a bit of extra time as they state in Clause 9.9 that they may send all of their communications by standard post, email or fax. Standard post may buy them a few extra days, e-mails may not arrive or may be trashed by the email program, and faxes may fail to connect.
• Clause 8.3 - Why the £100? The rest of the clause calls for payment in full of the equipment rental for the remainder of the period, and also 30% of the usage charges they would have expected for the remainder of the period. They can disconnect immediately and rent the equipment to someone else. They will also save their wholesale usage charges for the remainder of the period. So why the £100?
• Clause 9.5 - Whoa! Has anyone ever signed one of these contracts? Did they read clause 9.5? Unicom can change the terms and conditions at any time they feel like it. All they have to do is give 14 days notice and then the termination £100 fee can be changed to £1000 and the 30% of the estimated usage charges can become 50% or more, and the 10% above the Consumer Price Index may become 50%, 100%, 200% or whatever they want to make it. The rollover clause could be changed to having to supply 6 months written notice, and the opt out time in clause 8.1 (d) may be changed to 5 days.
• Clause 9.9 - Lastly, this clause is another one of those “we are always right and you are always wrong” type of clauses. If you want to communicate with Universal Utilities you must do so in writing and you must send it by Registered Post. Obviously they don’t want anyone claiming that a notice to terminate was lost in the post. However, Universal may contact you by regular post, e-mail or fax. So if they say they sent it, then they must have done. Why? Because obviously the company is loaded with honest people.

• According to the customer, Universal Utilities are enforcing their contract vigorously and court hearing is pending for recovery of the exit fees plus expenses.
• We have not sighted evidence that Universal Utilities are pursuing this course so we can't publish dates or figures based solely on the customer's statement.
• To date Universal Telecoms has not made contact with us to dispute the claims or attempt to justify their use of agressive contract clauses.
• This contract is published based purely on the use of aggressive one sided terms and the customer's complaint that the terms are being aggressively enforced with legal action
• Do a search on Google for "Unicom Telecoms" and check for yourself how many people are experiencing problems with this company.