* Make sure you are appropriately proactive in keeping up with your contract term commitments
The economic hardships that are being felt worldwide have not skipped over small businesses of all types. In fact, there are no bailout bills for small businesses. So we are finding small businesses reevaluating their telecommunications costs, and, due to this analysis, Steve recently planned a series of changes that including cancelling an SMB package with his service provider.
The economic hardships that are being felt worldwide have not skipped over small businesses of all types. In fact, there are no bailout bills for small businesses. So we are finding small businesses reevaluating their telecommunications costs, and, due to this analysis, Steve recently planned a series of changes that including canceling an SMB package with his service provider.
About three years ago, Steve agreed to install a “Business DSL” service. Part of the service that made this a cost-effective move was agreeing to a three-year service contract. However, he had no recollection of the automatic renewal of the contract – for the full term of the contract, although this may or may not have been discussed at the time. But on careful review of the three-year-old contract, Steve did find the automatic renewal clause. But there was a fatal flaw in the logic. He expected reasonable notification that the contract was being automatically renewed.
Fast-forward three years. A couple of weeks ago, upon making the cancellation call, he was informed that because he had a three-year contract that had just been automatically renewed, he would be subject to a $700 charge for the 35 unused months of the contract (at $20 per month).
Upon further discussion, the telephone representative stated that Steve had “been notified in July” on the July bill that the contract would be automatically renewed, and that he had been notified that he would need to cancel the automatic notification by the first of December.
So he pulled the July bill. Guess what? On the back of the bill (which one would not normally even look at since the charge is the same every month and it’s mostly ads), just above the advertisement for the service provider’s credit card and for using Wi-Fi at Starbucks, he found the following:
—————-AUTOMATIC RENEWAL
Continued savings! Your local service agreement will renew automatically. There’s nothing you need to do. Simply enjoy the ongoing savings every month, based on the terms and conditions of the existing local services agreement. If you do not wish to renew your local services agreement, send notification in writing at least 60 days prior to the expiration of your term or call [phone number redacted].
Note that this was not a separate notice – or even a notice on a card within the bill. More importantly, this did not note anything concerning the dates for the service contract. Was this a reasonable notice, a vague attempt to fulfill the “notification requirement,” or outright deceptive marketing? We’ll leave the call up to you.
Due to Steve’s aggressive pursuit of the issue, a request for a waiver of these was granted. But regardless, he’s one of the lucky few. As an analyst and journalist in this field, he had the ability and contacts to make his voice heard.
However, most other small (and large) businesses don’t have this luxury. If their job is being an electrical contractor, a restaurateur, or numerous other small (or large) businesses, they don’t have time or staffing to spend semi-countless hours fighting an intrinsically unfair (yet possibly legal) business practice.
With this in mind, we are calling on service providers to voluntarily cease charging cancellation fees for early termination of services as a gesture of goodwill to help SMBs of all types to survive the economic crisis. If nothing more, they should at least be much more proactive in helping the SMBs that are the backbone of the economy.
There’s also a lesson here for larger enterprises. As you are asked to do more with fewer staff, make sure that you are appropriately proactive in keeping up with your contract term commitments and that you’re not getting automatically renewed for services that you might want to change.
We’re continuing our dialogue with the service providers on this topic, and we’ll keep you abreast of comments that they would like to share with you.
