Internet provider’s unfair contract

31/05/2012 16:16

LOYAL customers of internet service provider (ISP) Connect who have been asked to migrate to new broadband packages are being made to sign a customer service contract that is unfair and harsh to customers.

The Consumer Council has continued to receive complaints from long-time Connect customers who have been asked by the ISP to move to the new packages that includes Connect Velocity. A look through the Connect Velocity service contract we have found clauses that are unfair and compromise consumers’ rights.

For instance the Connect Velocity contract includes a cancellation fee of $75 if a customer’s application is cancelled before installation of service (Plan Details). Connect has been unable to provide a response to the Council’s query on this sent almost 2 months ago. Connect has not responded on the question of how this $75 is justified. The amount is higher than the $30 minimum security deposit for the service. Connect has not been able to explain what it is recovering in terms of costs.

Also Connect’s new packages see customers’ service being stopped rather than being throttled as was the practice that loyal customers have been used. Throttling is fairer to the consumer because he/she pays for a 5GB data cap which works under a “use or lose” system, i.e. if you don’t use up the 5GB within a month, you lose it, but you still pay your monthly bill. Disconnecting a customer’s service for exhausting the data cap is totally unfair and harsh.

Connect is also applying an exit fee whereby a customer who terminates his/her contract before the end of the contract period will incur a penalty fee equivalent to one month’s rental and the customer also forfeits the security deposit (Clause 7.7). Exit fees limits a consumers’ right to choose a service with value for money and unfairly locks the consumer to the contract. Exit fees have been removed by the Reserve Bank of Fiji for financial institutions and it is only appropriate that Connect (and other ISPs and utilities companies) follow suit.

Connect’s also penalizes consumers who wish to switch to other ISPs. A customer forfeits his/her security deposit if she/he “chooses to switch to another internet provider” (Clause 7.1). The contract explicitly penalizes a consumer who is exercising his/her right to choose another ISP. This clause in the contract clearly shows Connect is engaging in a restrictive trade practice. The consumers’ right to choice is being restricted and competitors are being denied fair market access. This clause will have the effect of stifling or restricting competition in this market.

The Council continues to receive complaints from customers in regards to Connect’s new packages and what appears to be new ground rules designed to lock consumers to the ISP and penalize them for exercising their right to choice.

What is extremely disappointing is Connect’s treatment of its loyal customers who have maintained patronage of its services and not made the switch to other internet products that available in the market. Loyal customers have expressed their dismay at how they have been treated by Connect, where they have had to go through the tedious process of re-filling forms and re-submitting documentation. It is really a mystery why Connect is going through this costly and inconvenient exercise (both for Connect and customers) for its existing loyal customers when all the necessary information is already in the ISP’s customer database. Furthermore, customers who had decided to migrate to new packages had not received a copy of their contract when signing. The Council has had to ask Connect to provide customers with a copy of their contract which they are entitled.

Meanwhile, the Council has already lodged a formal complaint with the Fiji Commerce Commission to investigate Connect’s practices especially its customer service contracts. A letter sent to Connect on 3rd April remained unanswered or acknowledged despite follow ups by the Consumer Council.