Cashback Mobile Phone Deals Are Unlawful

Some terms and conditions in cashback mobile-phone deals are probably unlawfully unfair.

You can get mobile-phone contracts that allow you to claim cashback. These deals can halve the cost of your monthly bill for inclusive minutes and texts, or even make it totally free. For many people, surprisingly, these too-good-to-be-true deals actually work, but for a large minority they are an expensive mistake, as I explained in 8 Cashback Mobile Phone Tips!

The biggest problem with these deals are the onerous terms that are placed on us, the buyers. Having discussed this with a lawyer, it seems that many of these terms are likely to be considered by a court as unfair and unlawful.

The most unfair contract term

In particular, the term most likely to be frowned upon by a judge is the small window that is given to us to claim our money back. Typically, we must submit our claims for the cashback within a month or it is forfeit. Sometimes we're given even less time: just a couple of weeks. This places an unnecessarily strict responsibility on the customer.

Furthermore, each retailer sets odd dates for you to collect portions of your cashback, which might be the 3rd, 5th, 9th and 11th months of the contract, for example. Thus, it's easy for people to forget, or to get confused as to when they need to claim. 

I am advised that the window of a month or less could well be unfair. I'm also told that 'In general, any onerous term on the buyer without a corresponding onerous term on the seller may be held to be unfair.' So we might expect that the contract would give the seller an equally small window to pay the cashback. As vast numbers of customers have experienced, however, getting your cash can take a very long time.

Other problems with cashback deals

If you're considering getting a cashback mobile-phone deal, you should know about other difficulties, which may or may not be legally unfair, that I have been informed about by friends, readers and discussion-board users:

• Slow processing of cashback claims.
• Denials that cashback is due.
• Ignored requests for cashback.
• The terms and conditions disappear once you've completed your purchase, and you're not sent a paper copy. This means you have no proof that you're due cashback, nor do you have the details of when you need to apply for your cashback.
• Abysmal customer service from some retailers.

Beware of other more onerous terms too. At least one retailer requires that you send in every one of your previous statements during the prescribed periods. If you fail to return even one of them in the specified window, it will pay you no more cashback for the remainder of the contract!

My tips for using cashback deals

Despite all this, if you're organised, you can make these deals work for you. Here's what I suggest:

1. Do your research online to ensure you're using one of the more reputable retailers. A good place to start is by asking other Fools on our Mobile Phones and PDAs discussion board.
2. Get a folder ready now for your statements, and the terms and conditions. (If you're not willing or able to file your statements each month, these deals are not for you.)
3. Before you've even chosen a new phone deal, next time you walk past a Post Office, pop in and buy yourself half a dozen envelopes and stamps. Put them in your folder.
4. Read, understand and print off the terms and conditions as soon as they are shown to you. Put them in your folder.
5. As soon as you have the terms and conditions, prepare the envelopes by writing the address on them and affixing the stamps. If you need to send a letter or further information with your statements, write and print these now, and put them in the envelopes.
6. Write in your calendar the dates that you need to request your cashback.

So it's all common sense stuff, really.

What to do if you have trouble claiming cash back

If you've had difficulties claiming your money back, you might want to consider further action. I recommend you seek assistance from the experienced small-claims claimants on our Reclaim Your Unfair Bank & Card Charges discussion board. Post your problem there, with a link to this article, to get opinions and advice on what to do next.

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8 Cashback Mobile Phone Tips!