‘£54k to Rent Five Phones is Killing My Business’: Small Firms Trapped in Costly Telecom Deals

A growing number of small businesses across the UK say they are being crippled by “grossly inflated” costs for basic phone equipment rented on lengthy finance contracts — deals that some business owners claim were mis-sold and have left them teetering on the edge of collapse.

One of those speaking out is Gary Pride, who runs a small graphic design firm in Bradford. After weathering a recession, a devastating fire, and the uncertainty of the Covid pandemic, Mr Pride says it is now his phone contract that is threatening to close his doors for good.

He’s locked into paying a staggering £54,432 — excluding VAT — over ten years just to rent five office phones and some related software. Choking back tears in his small workshop, he says signing the contract has “ruined his life”. “I’ve not been paying myself so I could pay that bill, every month,” he says, explaining how the burden has taken a serious toll on his mental health. He now struggles to sleep and takes antidepressants to cope with the anxiety.

“I feel like I’ve let myself down, and I’ve let all my staff down,” he tells the BBC.

Mr Pride first signed up with telecoms firm 4Com back in 2017. He agreed to what was described as a seven-year finance deal with a third-party company to lease 4Com’s HiHi phones and software. But he claims the full cost was not made clear to him at the time. He says the harsh reality only hit him after an initial two-year “introductory offer” ended and his monthly bill suddenly more than doubled — jumping from just over £200 to more than £550.

The contract paperwork, seen by the BBC, does state that the customer would be billed separately by a finance provider under a “universal rental agreement”. But Mr Pride insists this wasn’t properly explained, adding, “No-one on this planet would have signed if they’d known the real total.”

When he complained, 4Com offered him a so-called “loyalty rebate” — but only if he signed yet another seven-year contract for upgraded phones, locking him into fresh finance while still paying off the original agreement. “I felt I had no choice but to stay with them to keep my payments down,” he says.

Now, Mr Pride owes more than £54,000 over a decade, on top of other fees to 4Com for things like maintenance and broadband. He says the final cost feels surreal: “I could get a top-of-the-range Range Rover for what I’ve paid for them. I just feel stupid.”

Even if he wanted to escape the deal, he says he cannot afford the £24,584 quoted by the finance company to terminate the agreement early.

He is not alone. The BBC has seen several similar cases of small business owners who, like Mr Pride, say they were persuaded to sign a second lease agreement just a couple of years into their original contract — deepening the financial burden and tying them to costly payments for years to come.

Industry experts warn that aggressive and “unethical” sales practices like these are leaving small businesses trapped in contracts they can’t afford — and at risk of losing everything they’ve worked so hard to build.