Tuesday, 23 June 2015

Do I give in to blackmail?

We have a customer with a dispute, and of course we want tor resolve it. I'm not going to give any personal details here, obviously...

The dispute is relatively simple, he asserts that we told him 100GB/mon for Home::1 would be fine for a house of 5 adults all separately watching netflix every night. Unsurprisingly he used 100GB in 10 days. Home::1 has a minimum term of 6 months and a very reasonable early termination charge.

Now, let me say right off, if we did say that to him, we will sort something out for him - more allowance for 6 months or leaving with no early termination fee, or whatever. If we screwed up and said something wrong, we will take responsibility for that. We have ticketing for emails and record all calls, so it should be simple to work that out. Sadly he is being a tad vague on times or numbers or names of people he spoke to. Hopefully we can confirm this.

He had a huge long debate with our accounts department over what is "average usage". We explained what we say on the web site and ordering pages and what OFCOM have reported about average usage for broadband. He seems to think he is "average", which is clearly not the case, but all irrelevant - we sold him 100GB.

The problem is that he is now talking of ADR (Alternative Dispute Resolution).

Obviously we are going to try and resolve this, and ideally come to an agreement without involving ADR, but at the end of the day ADR is a huge problem with this and massively impacts negotiations.

The early termination charges are much lower than the cost of ADR even if we only look at the fee we have to pay (and ignore all the time and effort) and even if ADR finds we are completely correct and we are not ordered to pay anything or do anything. This means the threat of ADR is effectively blackmail. The customer can simple be as difficult as he likes; insist we said things with no evidence of that; and demand he can leave with no early termination charge "or else, ADR".

What concerns me is we may find the call recording and prove we did not say that, and so have done nothing wrong, but he can still demand ADR and still put us in this annoying position of choosing to cave in to blackmail or pointlessly go through ADR - a process which would not "resolve" the dispute.

If we cave in, we save money compared to ADR, but what is to stop everyone who changes their mind just invoking "ADR", making a total mockery of simple fair contract terms.

Very frustrating. We'll see what we can do to resolve it anyway, and what evidence we can find. In the long run we have have to think of other ways to package services as clearly "early termination charges" may effectively be un-enforceable on consumer products. I'll try not to get stressed this time.

P.S. One way this may be resolved in future is with routers getting cheaper, migrations getting cheaper, people already having FTTC, and, of course, cheaper back-haul bandwidth. Eventually there will be no need for any minimum term and no reason for someone that simply "misunderstands" not to simply move on to their next ISP as complete resolution of the issue. We can but hope.

P.P.S. In all the years I have been blogging, you can see disputes really are rare - I would not expect to blog every disagreement, but an actual unresolved dispute is incredibly rare and I think I probably have blogged every one so far - making me wonder even more why the hell ADR even exists.

32 comments:

  1. It's a reasonable assumption that he had no idea what his usage was, or the huge amount of bandwidth Netflix uses (specially when it steps up to 1080p), and thought 100GB would be enough, and because he has made a bit of a dick of himself he's trying to wriggle out the contract by lying about what he was told - hence the very vague dates and times.

    Personally, I'd sack him. He's obviously just pushing his luck, like people seem to do regularly these days. Not worth the hassle or stress in my opinion.

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    1. We do explain the typical usage levels and how much streaming video is likely to use one the Home::1 web page to try and avoid this. We don't want to mislead anyone. Indeed, I may well let him leave with no penalty as the compromise, but still I'd rather not have my hand forced by the threat of ADR.

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    2. No, the threat of ADR is well out of order, but certain people won't take responsibility for their own mistakes / misreads / misunderstandings / errors / stupidity et al - someone else *always* has to be to blame. Looks like you ended up with one of "those".

      Netflix running at full quality "Super HD" 1080p (6Mbps) uses 2.7GB of data per hour, so you get 37 hours of video in 100GB - the Home::1 web page refers to iTunes movies, but I think Netflix is the real bandwidth eater!

      But that aside, even taking what is on that page currently, 100GB is only good for *one* ~1:30 feature film per night (approx 3GB).

      Nobody who actually read that Home:1 page and thought about it would come to the conclusion that 100GB would be enough for 5 Netflix streams running each night...

      Clearly a case of PEBKAC lol.

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  2. ISTR that last time ADR came up, you discovered that if you sued the customer before they went to ADR, it'd prevent ADR getting involved.

    If that's still the case, I'd be inclined to terminate all ADR-relevant services as requested, then use the small claims court to pursue for the early termination fees. A loss is educational for you, at relatively low cost, and a win is a county court judgement against your former customer.

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    1. You are devious Simon, interesting idea... I'll see how negotiation goes.

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    2. I did think about that too, but my thoughts/questions were:

      If you terminate the services and charge the early termination fee, can he still take you to ADR at that point?

      And, if the above is yes, if you don't charge the early termination fee at the time of termination (to avoid the problem of ADR), can you later pursue it through the small claims court?

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    3. How can ETFs apply if the termination is by the ISP rather than by the customer?

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    4. Indeed, if we terminated we would not charge. BTW, what is your view of a telco charging a termination fee (to cover re-jumpering and updating records) when *they* terminate the service? BT do this to us.

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    5. Sorry, I wasn't entirely clear when I said 'you terminate' - I really meant 'you terminate on request of the customer'.

      If he, for example, signs up with another ISP, the services will be migrated in 10 days as per the new system, which terminates the service with you. Therefore, you rightly charge the early termination fee.

      Can he take you to ADR at this point to attempt to have the fee waived?

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    6. If I remember correctly:

      - ADR only applies to someone who is a customer
      - when someone applies for MAC (old world), their contract automatically terminates

      However, the rules may be interpreted expansively...

      (I don't think that an ADR provider has the power to enforce their award against a provider, though.)

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    7. When reading the original post I was also thinking why not turn it around and just go to small claims.. but I don't know the intricacies of what would happen to potential ADR action if you did that.

      While on holiday and constantly monitoring my usage I've worked out that I need about 3GB per day for just myself! Let alone family members or visitors.
      It is quite frustrating that providers like Sky and BT don't provide usage figures for some of their packages so you have no idea of what usage you might need if you were to move provider.

      However I would never have thought that 100gb usage is a good idea for residential usage with many internet users in the house.

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    8. My thoughts on this are:

      1. I would wager that _most_ users have no idea how much bandwidth they are using. If you're coming from an "unlimited" account, you wouldn't be monitoring the bandwidth (hell, I'm not on an "unlimited" account, I have Cacti running on my firewall and I still have no idea how much I use because I haven't looked at the Cacti stats in years. Obviously if I were switching to a new account with lower limits I would consult the stats first, but most users aren't going to have this set up and a lot of ISPs don't provide that information). That said, you do provide information on how to estimate usage - I guess you'll find out whether you accidentally gave him wrong information on the phone.

      2. I'm not sure how a household of 5 people watching Netflix independently every night could ever be considered "average", given that the average number of occupants in a household in the UK is far lower than 5, and most households don't have everyone independently Netflixing each night.

      3. The customer may not realise that ADR has a cost to you, and the customer _may_ feel like they are in the right (even though to everyone else they look in the wrong), in which case threatening ADR seems reasonable. Even if they are aware that ADR has a cost, threatening ADR may still seem reasonable if the customer feels they are in the right (isn't this kinda the purpose of ADR in the first place?).

      4. Whether or not the customer is wrong, I can't help but think that getting a reputation for suing your own customers is a bright idea...

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    9. Indeed, I do wonder if the customer thinks this is "blackmail" in any way. And indeed, a reputation for suing our own customers would not be ideal - it happens very very rarely as you can imaging, and is almost always because someone has not paid their bills.

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    10. What I've done in the past is "called their bluff" (but you've got to be really sure about yourself to do so). Tell them that if they can provide the number they called from and the approximate dates you'll be able to find the call recording (as all calls are recorded) and if a member of the staff did say that, you'll happily cancel the contract, full reimbursement of the month and a 50%/£100 "inconvenience fee" paid to them. However, if the recording can be found and a member of staff did not say that (or anything that could sound like it), or if the recording cannot be found and they are unable to provide any evidence from their end that the call actually took place (billing records etc), then they are liable for the contract and have to pay your "investigation fee"... The number of people that then "back down" is astonishing....

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    11. If you have a customer who is generally happy with the service, but a bit surprised about usage, threatening them with an "investigation fee" for providing the with what is, in effect, a customer service function, sounds a bit over the top, and unlikely to build a good reputation?

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    12. Indeed, I don't think that works - as someone else said, some extra usage in first month while we investigate things - makes perfect sense. We are not trying to argue with people. The problem is the "ADR" issue being raised.

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    13. To be fair, the customer probably has no idea that the ADR costs you money, and therefore no idea that he is implicitly blackmailing you. He's probably thinking of it Ombudsman-stylee: if you reach an impasse, they fix it. The costs are outside his knowledge.

      And yes yes to people not knowing about their usage. A lot of your customers will have Cacti or similar before they switch to you. But they/we are the lunatic fringe...

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    14. I don't like the whole "investigation fee" idea, but it is exactly how BT work with faults (as RevK is well aware and frequently blogs about) - if you think a fault is BT's problem then you call them to investigate, if its their problem then they (should) fix it, if it turns out not to be their problem you get a bill.

      Personally, whilst I understand BT's position, I think this is a terrible way of doing things because you're constantly under the treat of being hit by some large fee whenever you ask BT to investigate a fault, even if you've done your best to ensure that it isn't a problem with your own equipment.

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  3. If there is indeed a legitimate concern, I would be a bit miffed as a customer to find my situation being played out — even without identifying information — on a company's (director's) blog under the heading of "Do I give to blackmail?", with some comments, approved by the aforementioned director, stating quite boldly that the problem is the customer.

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  4. Thoughts:

    - "Normal" people neither know their usage, or regularly (ever?) look at clueless. They also get confused by / don't realise the difference between bits/bytes etc.
    - Worth adding some extra notifications for Home::1 – i.e. allow users to have more than 1 quota email per month, and maybe default to 25%, 50%, 75% of usage, to give people a better idea, earlier on?
    - If companies do routinely back down on enforcing minimum terms, that's irritating to the kind of people (everyone reading this?) who check the contract properly before they signup and wouldn't dream of "trying their luck".

    Care to make a long-term prediction if or when you might be able to raise the 100GB further? By which I mean, any signs that BT are likely to lower their wholesale charges or you will eventually be able to buy backhaul for FTTC users from elsewhere? (I see, for unit pricing, BT and Talktalk are currently the same.)

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    1. Indeed, it is unfair on those that do pay attention. As to the 100GB, well, yes and no. I have been predicting a bandwidth price drop for years, wrongly. However, we may have some options soon on entry level FTTC with the line (copper pair) with a lot more usage allowance. We are working on it now. Watch this space.

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    2. Aaargh. If my father, who can get FTTC but uses <100GB per month can have an increase while I, who can't get FTTC because of cabinet issues have to continue to pay for 200GB plus occasional excesses, I shall be somewhat annoyed :-)

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  5. Personally, if this had been referred to me, I would have done the following…

    As a good will gesture I would have increased his allowance for the remainder of that billing cycle whilst we investigated the claims being made.

    I would have done that for one of two reasons, the 1st is that if we have made a mistake the customer should not be impacted, the 2nd is even if we didn’t say that, the customer has obviously picked the wrong tariff, almost certainly not deliberately, a bit of compassion and understanding can go a long way…

    I’m going to assume AAISP didn’t mis-sell, so that leaves two options, either they cut back on usage next month or pay for the 200GB or 300GB usage limits.

    With regards to the ADR scheme, you just have to take it on the chin and build that into your future costs if it becomes an issue. A very small minority of customers will be motivated by the prospect of a monetary “good will” gesture, so you’re never going to please them, their goal is firmly set.

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    1. Oh, definitely doing that anyway.

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    2. I've got to agree with the "take it on the chin" thing. Businesses with many customers make their profit on the aggregate of *all* their customers (aka "the bottom line") and whilst it may feel painful to make a loss on a single customer, this often just has to be accepted as a cost of business and swallowed.

      I'll give a recent example I've had where I was the customer: A retailer was doing a "clearance" sale and I bought an item (~£120). Because it was on sale, the retailer probably only made about a fiver. Unfortunately the item was faulty, so I returned it. This automatically means the retailer probably couldn't avoid making a loss on that sale.

      SOGA meant the retailer had to replace or refund the item - if they had done so immediately they would have made a loss, but I would have been happy. As it was, they spent weeks farting around with their supplier, failed to keep me informed about the progress. I ended up having to post a public rant on Facebook in an effort to get things moving. The rant got the attention of quite a lot of people who would be interested in buying similar products, so in the end they next-day'd a replacement to me in an effort to avoid bad publicity. So rather than just swallowing the inevitable cost, they ended up costing themselves more (by having to pay for next day delivery) and stirred up a load of bad publicity for themselves - all that can only hurt their bottom line more than just swallowing the cost.

      The moral of this is - sometimes you just have to accept a loss to garner good PR and avoid negative PR, and in the long run this can help your bottom line.

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  6. We started with 100 (or was it 150?) GB on Home::1, and it was fine for a while, but just one person using Netflix more (quite a lot, it seems), meant we ended up topping up a couple of times. So we increased to 200GB, and blew through that too. And now we have 300GB. But it seems that usage must have dropped (wife watching Netflix less, I guess) and we have 130GB left with a week to go. This has been typical for a couple of months now, I think.

    Predicting usage is not easy, or consistent!

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    1. Indeed, and it is a nuisance. The world is changing and usage is increasing. Links are faster so you can use a lot in a small space of time without realising. The back-haul costs are STILL as high as they were many years ago, and that needs to change. I think it will, soon.

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    2. Out of interest — do you still not charge for upload, or does this now form part of the bundle?

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    3. We don't charge for upload on broadband, no. No need to really.

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    4. Thanks for the confirmation. I suspect volumes are pretty low? (It was one of the reasons I took Home::1 on FTTC: to get a decent VPN speed when I am travelling, and to be able to stream videos from the media server.)

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    5. The thought just occurred to me that this isn't too dissimilar to other metered services (water, electricity, gas). The difference there is that those services are typically not metered on a monthly basis - they get averaged over a longer period (6-12 months). So:

      1. Would this be a better model for bandwidth? Pay-per megabyte, averaged over a 6 month period. You'd want to have good reporting tools to try and avoid surprising people with a massive bill; however, people do get surprised by larger than expected energy bills from time to time and basically just have to suck it up (although the energy companies do tend to spread the payments rather than demand a single massive payment with little notice). There's also a lot more scope for rogue software sucking up all your bandwidth and going unnoticed for a while than there is for something sucking up all your electricity - people tend to notice if a cannabis farm with kilowatts of electric lighting has just suddenly sprung up in one of their bedrooms. :)

      2. Is this going to start to become more of a problem for energy billing with the introduction of smart meters? Suddenly it will be possible for energy companies to bill exact amounts on a monthly basis, just as you can for bandwidth.

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  7. Perhaps you could charge a Special Finance Investigation (or SFI) fee for accounts problems that covers the ADR cost? :P

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