A customer of collapsed Midlands cashback retailer Mobile Connections (Dialamobile) has had three of his Orange contracts torn up in a case that could spell trouble for operators.
The Communication and Internet Services Adjudication Scheme (CISAS), which settles disputes for Orange and T-Mobile customers, ruled the customer could end his contract because of ‘significant changes’ from his original agreement.
Mobile operators have always maintained that cashback is a separate arrangement between the customer and retailer, but this latest ruling acknowledges customers' reliance on cashback payments to pay airtime bills.
Roger Godsiff MP, whose constituents bore the brunt of the collapse, said: ‘CISAS has not just looked at the strict legality, they’ve looked at the moral obligations of the case, and I would urge other T-Mobile and Orange Mobile Connections customers to contact them.’
The Birmingham man, who had three £40 Orange contracts, was left without any cashback when Mobile Connections went bust in September last year owing £12m to 90,000 customers.
The customer claimed that without receiving any cashback he could not afford to pay the £1,496 demanded by Orange.
And he said it was not made clear that he couldn’t cancel prior to a minimum term without a penalty.
Head of trading standards at Birmingham City Council Chris Neville said it was the first case of its kind that he knew of, and he described the outcome as ‘a victory for common sense’.
Mohammed Afazal, who runs a support website for Mobile Connections customers said there were another 50 cases pending with CISAS, and they were ‘pretty much identical’ to it.
A spokeswoman for Orange said that due to CISAS guidelines, she could not comment on the case.