Vodafone 'left store managers suicidal'

Vodafone "unjustly enriched" itself at the expense of scores of vulnerable small business owners by slashing commissions to franchisees running the mobile phone group's high street stores, according to allegations filed yesterday in the high court.

- Simon Goodley

A group of 62 of about 150 Vodafone franchise operators - some of whom said they had had suicidal thoughts because of the pressure exerted by the telecoms group - say the resulting personal debts have prompted them to join a £120m-plus legal claim against the company.

Vodafone is valued at more than £18bn on the London Stock Exchange and has just been granted regulatory approval to create the UK's largest mobile phone operator by merging with its rival Three.

The court papers allege Vodafone acted in "bad faith" by unilaterally cutting fees to franchisees, imposed swingeing fines on them totalling thousands of pounds for seemingly minor administrative errors, and then cajoled them into taking out loans and government grants to keep their businesses afloat.

Many said they feared losing livelihoods, homes or life savings after running up personal debts of more than £100,000. Some franchisees claimed regional managers had told them that only their stores were in difficulty, in messaging that some complainants allege echoes a theme in the Post Office scandal.

Rikki Lear, a claimant who ran three franchise stores in Kent, broke down as he told the Guardian: "They left me thinking about whether I wanted to continue on this earth. The only thing that kept me going was my family and my daughter." The Guardian has spoken to other franchisees who have relayed similar stories.

Vodafone, which had not seen the legal claim when it was approached by the Guardian for comment, said: "We are sorry to any franchisee that has had a difficult experience." It "strongly refutes" that the company "unjustly enriched" itself and said it has conducted "a number of investigations" into the allegations, which resulted in the company making "a number of improvements to our franchise partner programme".