Business ISP 4Com Criticised Over UK Broadband and Phone Contracts

Bournemouth-based communications, IT and broadband provider 4Com has come in for criticism from some of their UK customers, who have complained about being hit by dramatically higher prices than they originally agreed over the phone. Sadly, business-to-business contracts lack many of the same protections as consumers enjoy, leaving some small firms in a dire situation.

According to the BBC News report, the owners of the Ashleigh Residential Home in Chesterfield thought – based on a 2023 call they had with a 4Com sales agents – that they were signing a contract for a fixed cost of £329 a month for two desk phones, two handheld phones, broadband and services on a 5-year contract.

However, when the first invoice arrived a couple of days later, the charges that it set out as being in the contract, which they had now signed, were different from what had been verbally promised over the phone (what’s that old saying.. “a verbal contract isn’t worth the paper it’s written on“). The BBC states that two years into the contract, they could be paying as much as £600 per month, which the owners claim “could finish the business“.

The catch is that 4Com did set out all of the charges in the paperwork that the business owners were ultimately sent and signed, albeit clearly without the owners realising that those charges were not what they thought had been agreed. In addition, the contract terms they had been sent ran for 7 years, not 5 years as discussed, and they had also signed a rental agreement with a separate finance company to hire the equipment.

A second business, a tool hire shop in Hinckley run by Craig Lakin, also complained about a similar experience to the BBC and has since been threatened with legal action if he does not pay more than £12,000 to the finance company who he said 4Com signed him up with to rent the phones. Craig said he would “rather close the business down, than give them the money” as “a matter of principle“.

In response, 4Com said they took the complaints seriously and were “extremely sorry to hear that these two customers are unhappy“. But the company added that it has had multiple interactions with the customers to confirm awareness of key contractual points prior to installation, and continually reviews processes to ensure communications are clear and easy to understand.

A 4Com Spokesperson told the BBC:

“Having thoroughly investigated the customer accounts and call records, we have seen no evidence that they were misled, in relation to either the contract price and structure, or the availability of a cooling-off period.”

Sadly, it’s not the first time we’ve seen situations like this crop up in the industry from different providers, and the BBC notes that they’ve also had a fair few other complaints about 4Com in the recent past (here). At the same time such customers can’t benefit from the Consumer Rights Act 2015 and Consumer Protection from Unfair Trading Regulations (CPR), as these don’t govern business-to-business contracts

Instead, business contracts tend to be subject to the Sale of Goods Act 1979 and Unfair Contract Terms Act 1977. For businesses the only real avenue is thus to complain to the ISP and then, if that fails, take the matter to court. But the costs and fear of taking the legal route often discourages its pursuit.

The Federation of Small Businesses (FSB) has suggested that the government could respond by bringing in a cooling-off period for small businesses. At the same time, the UK Small Business Minister, Blair McDougall MP, said it was “disgraceful to hear that small businesses are being taken advantage of in this way” and called on telecoms regulator Ofcom to do more to protect them.

The regulator itself reiterated that telecoms providers are required to give small businesses clear contract information and warned that, when they “see evidence of widespread issues, we’ve shown we can and will consider taking action“. For those with a long memory, Ofcom’s 2014/15 investigation and subsequent £200,000 fine of business comms provider Unicom may serve as a useful example (here).

In the meantime, while many consumers can often get away with simply skimming through contract terms, it’s particularly important for smaller businesses to always read the terms properly due to the lack of protections available if they fail to do so.