My Lords, I support my noble friend in this amendment, in particular subsection (4). I am glad that my noble friend used the word “obligations” because if I had looked at this earlier I would have wanted to move an amendment calling it “Display of information about rights and obligations”, because that can have a greater impact on the consumer. I support the amendment because I concluded, in the last few years that I was a Member of Parliament in another place, that some of the worst cases coming to my constituency surgeries were people who had been stitched up by the big utility companies and the mobile phone operators. In many cases there were only oral contracts. When they had a concern, they would get on to the helpline. As innocent constituents, they kept making the mistake of thinking that if they phoned and got through to the special helpline the problem would be solved. Of course, the people on the special helpline would say, “Yes, that’s fine, we’ll take your point into consideration and it will be amended”—but still the threatening letters and the bailiff’s letters came because, very often, the people running the helpline had no power to alter the computer accounts for the company.
A written statement is absolutely essential if there is an oral contract. As the noble Lord, Lord Harris of Haringey, pointed out that we seem to go by personal example. I shall cite one example of why I think the mobile telephone companies in particular are among the worst offenders. Some years ago, I took out a contract for a mobile phone. It was clear when I had the paperwork the first time that, if I cancelled the contract within two years, I would pay a heavy penalty. I was content with that and went blithely on my way. As it transpired, exactly 23 months later, I got a telephone call, “Hello Dave, it’s your mobile phone operator here—do you realise, Dave, that you can get a better tariff from us? We’ve looked at what you pay and you can reduce the Bill by about £2 a month, and you’ll get a free telephone upgrade”. I thought that was jolly good and asked what the catch was. “Oh, no catch, Dave, that’s it”. So I agreed to it. A few months later, when I fell out with that telephone company because I did not like the service and wanted to cancel, they said, “You can’t cancel, your contract’s only three months old”. I said, “No it’s not—it’s 27 months old”. “Oh,” they said, “that telephone call you had created a new contract”.
I appreciate that all of you here are commercially savvy and knew that, but in 2009 or 2010, I did not realise that. But then I found more and more constituents with the same problem. They were being sold things over the telephone, particularly electricity contracts from one particular supplier, and they never got the follow-up paperwork. It is absolutely essentially that when any contracts are made or revised orally, the consumer gets a written statement pointing out their rights and obligations. I hope that with changed or improved wording my noble friend the Minister will be able to accept the principle of this amendment.