Small businesses should be wary of telecommunications contracts offering cheaper services combined with incentives such as phone equipment, laptops or plasma-screen TVs.

The TIO is receiving up to 20 complaints a week from small businesses who say they were misled about, or did not fully understand, the nature and operation of equipment leases bundled with telecommunication deals when they signed up to them. “Small businesses are telling us they are being approached by a sales person who offers a contract for call costs at the same price or less than what they are currently paying. They also say they were offered a handset, plasma TV, laptop or even an overseas holiday at ‘no extra cost’,” Deputy Ombudsman Simon Cleary said. “What small businesses sometimes don’t fully appreciate is that they are signing two separate contracts: one for the phone calls with a telecommunications service provider and the second being a lease of the equipment from a finance company.