Undercover Probe Uncovers Alleged Mis-selling of Phone Contracts to Small Businesses

An undercover inquiry into the purported mis-selling of phone contracts has brought to light dubious sales tactics, leading to demands for enhanced regulatory oversight. The BBC engaged with 12 small businesses that claim they were deceived. Paul Toplass stated, “I feel sick every time I think about it.” He added, “I’ve been in business for over 25 years. We’ve never experienced anything like this.” Mr. Toplass, proprietor of a pest control company, reported being misled into entering a business agreement for three mobile phones, from which he is now “powerless” to withdraw. This situation has resulted in him “being asked to pay over £10,000” for devices he estimates are valued at under £200 individually. Covert video recording of a sales presentation by a Hii Communications Ltd representative demonstrated the individual making verbal assurances that did not precisely correspond with the contractual provisions and omitting to emphasize clauses concerning third-party financing and additional fees. The Lincoln-based company, also known as Hii Com, asserted that it operated within “guidelines and rules set out by our funders”. Mr. Toplass, a Nottingham resident, alleged that crucial details about the contract he signed in February 2023 were withheld from him. He stated that he believed he was entering a two-year agreement with Hii Com and was unaware he was leasing the phones through a finance arrangement with a separate entity. He had “completely trusted” the salesperson but later regretted not reviewing the fine print. The agreement specified that the equipment would be leased by a third party—the finance firm Grenke—over a period of 27 quarters. Mr. Toplass discovered he now had a debt exceeding £10,000, payable across seven years. He remarked, “They never at any point said we were entering a lease-hire contract.” He continued, “It’s morally wrong on every level. We do business and we are open and transparent with every one our customers. Upfront, fixed pricing. This business didn’t do any of that.” Hii Com asserts it serves over 3,000 clients. The BBC conducted a covert filming of a 90-minute sales presentation delivered by a company representative. During this meeting, a prospective customer was assured three times that he would exclusively interact with Hii Com. No mention was made of a lease hire agreement. He was informed he was signing a five-year contract amounting to £18,100 and was given a “price promise” to secure the cost. Following an hour, the salesperson requested the customer to sign a seven-page document. Nevertheless, after being informed by the BBC about grievances from other businesses, the customer proceeded to examine the contract thoroughly. He discovered it included additional expenses after the initial year and was for a duration exceeding what had been discussed. Upon being questioned, the salesperson proposed striking out seven distinct sections. These included a provision outlining an “annual maintenance charge” of £983 after the first year, which the salesperson claimed was only applicable if the customer lacked insurance. When repeatedly asked why the contract spanned 84 months—two years beyond the verbal assurance—the salesperson explained that the business would possess the phones after five years and subsequently incur a “licence” fee during a two-year upgrade phase. Although consumer legislation grants individuals a cooling-off period post-contract signing, businesses do not benefit from similar safeguards. Mr. Toplass lodged a complaint with the telecoms regulator Ofcom, only to be informed that it does not handle individual disputes. He subsequently approached the Communications and Internet Services Adjudication Scheme (CISAS), but was advised he lacked evidence, such as “photographs of the documents at the time that he signed them”. CISAS determined that “on the balance of probabilities” he had “agreed to contracts with minimum terms of 84 months”. Mr. Toplass stated that it was impractical to anticipate individuals being able to furnish the requested photographic evidence. He commented, “You are on your own.” Each of the 12 small businesses interviewed by the BBC alleged that sales representatives failed to inform them about the third-party lease agreement or additional costs. After signing, all were informed they were committed for seven years. Upon viewing the covert footage, financial lawyer Arun Chauhan remarked: “Whatever is put in writing, you can see how these customers are being told one thing that they almost feel so trusting in that they don’t really need to read the agreement.” He added, “I know that ignorance is no defence in terms of the law, but people get to the contract and they think, ‘I’ve been told everything I need to do’. So they sign it.” He expressed hope that Ofcom or financial regulators would conduct further investigations given the BBC’s discoveries. Hii Com stated: “All our customers are aware that they are entering a lease agreement from the outset.” The company also mentioned that CISAS had concluded it had “behaved properly and correctly” in Mr. Toplass’s situation. Grenke announced it would undertake a “full internal review” of its telecommunications portfolio. It affirmed its commitment to transparency but noted there was “an expectation and obligation that the customer completes their own due diligence”. Miya Fu, who operates a scarves and accessories enterprise in Manchester, recounted agreeing to a meeting with Hii Com after a representative informed her they were a BT wholesaler—a claim also present on the company’s website. She stated she had “diligently checked” the contract, and only when funds began to exit her bank account did she discover she was bound by a seven-year agreement with a finance provider. She expressed feeling “betrayed” and anxious because “you never know what you’re going to be paying” each month. BT confirmed that Hii Com was not an accredited BT Wholesale partner for fixed broadband products and services, and expressed being “concerned to hear about the examples raised by the BBC”. Dave Millett, an independent telecoms consultant, observed that few individuals were aware that CISAS received funding from the industry itself, and that there was “no obligation on any supplier” to join it. He advocated for “a genuine independent ombudsman”. CISAS stated that complaints were “carefully assessed by a trained independent adjudicator with legal qualifications”. Businesses dissatisfied with the outcomes could decline them and pursue legal action against a provider via the county courts. The Financial Conduct Authority indicated that its regulatory authority did not extend to investigating the concerns brought to light. For Mr. Toplass, this experience has prompted “soul-searching moments.” He reflected, “How have I got myself into this position, how have I put the business into this position?” He added, “You do business every single day and you trust. It’s about trust with the person who sat opposite you.” He concluded, “To then find out months and weeks later that you have been conned is not a nice feeling.” Individuals wishing to share their experiences, positive or negative, regarding sales techniques within the telecoms sector are invited to email yorksLincsinvestigations@bbc.co.uk, including a contact number if they wish to speak with a journalist. Further content is available by listening to highlights from Lincolnshire on BBC Sounds, watching the latest episode of Look North, or submitting story ideas here. Copyright 2024 BBC. All rights reserved. The BBC bears no responsibility for the content found on external websites. Information regarding our external linking policy is available for review.