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Daisy looks for end to dealer pay dispute

Michael Garwood
August 4, 2010

Legal threat despite Daisy Communications’ good-will payment to business dealer SEC Consultants

Daisy Communications last week hoped to have settled an ongoing dispute between a dealer and its airtime subsidiary Fone Logistics over clawed back commission.

Scottish B2B dealer SEC Consultants accused Fone Logistics of breach of contract. SEC claims it was wrongly clawed back £1,092 of commission after Vodafone disconnected six of 38 new numbers it signed via Fone Logistics in January this year.

The customer had originally had his account managed by Vodafone directly, but went via SEC to gain better line rental, achieved by commission received for SEC signing him as a new customer.

An ongoing ‘hardware fund’ issue with the old account meant it remained open and telephone numbers therefore remained active. When the customer requested, after five months, to port six of the numbers to the new SEC-managed account, SEC was clawed back £1,092 for commission on the six lines.

After discussion with Fone Logistics, SEC’s commission payment was adjusted to £528 for ‘internal migration’ of the six lines.

SEC was made to pay back £564, the balance of the original commission payment.

SEC managing director Paul Smith claims Vodafone terms and conditions state clawback is not applicable for accounts which have been successfully billed for three months straight, and that the customer should not have been allowed to port the numbers in the first place.

SEC has, since Fone Logistics’ £3.6 million purchase by Matthew Riley’s Daisy Communications in June, requested the £564 be returned by Daisy for being wrongfully clawed back from him. It has filed a claim at a small claims court in Northampton.

But Daisy Communications last week denied any breach of its terms and conditions and refuted all of the allegations made against it.

However it made an “ex gratia payment” of £564 to SEC to close the dispute “as a gesture of goodwill”. It said it made the payment because of “the sums involved and the significant management time taken up in responding to numerous and varied emails from Mr Smith”.

It said: “The ex gratia payment has been made on a without prejudice basis and on terms that Fone Logistics in no way accepts any liability for the allegations made.”
SEC said it will not withdraw the claim until cheques have cleared and £110 of legal fees and compensation is paid to it.

Smith said: “I am not one to suffer in silence. I have been in this game a long time and have never heard of a customer being allowed to disconnect without paying up the remainder of the contract after five months. They have moved the goal posts to help themselves.

“They have paid the owed money but they won’t acknowledge they made a mistake. They think they can walk over us but they can’t.”

Daisy Communications said in a statement: “Fone Logistics reserves all of its rights in connection with the allegations made by SEC Consultants, which, by their very nature, are potentially harmful to Fone Logistics’ reputation.”

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