According to Ofcom research, more than 20 million customers have gone beyond their initial contract period. Many of these could be paying more than they need to.
People who bundle their landline and broadband services together pay, on average, around 20% more when they are out of contract. This rises to 26% among customers who bundle their pay-TV with these two services.
Around one in seven customers (14%) don’t know whether they are still tied to their original deal; and around one in eight (12%) believe they are still in contract, but don’t know when that contract ends.
New alerts for customers
Ofcom has stepped in to ensure fairness for customers, by forcing telecoms and pay-TV companies to warn customers between 10 and 40 days before their contract comes to an end. These alerts will be sent by text, email or letter.
They will include:
- when the contract ends;
- the price paid before this date;
- any changes to the service and price paid at the end of the contract;
- information about any notice period required to end the contract; and
- the best deals offered by your provider, including telling existing customers what prices are available to new customers.
People who choose to stay with their provider without signing up to a new contract will be sent a reminder every year about their firm’s best deals.
Lindsey Fussell, Ofcom’s Consumer Group Director, said: “We’re making sure customers are treated fairly, by making companies give them the information they need, when they need it.
“This will put power in the hands of millions of people who’re paying more than necessary when they’re no longer tied to a contract.”
The changes will involve providers sending personalised and tailored information to millions of individual customers. To make sure they get this right, companies will have nine months to make the necessary changes to their systems and processes. Customers will start receiving the notifications from 15 February next year.
Fairness for customers
Ofcom Fairness for customers campaign has also recently introduced:
- money back for broadband and landline customers when things go wrong;
- clear, honest information for broadband shoppers – before they commit to a contract – about what speeds they will get; and
- a major information campaign and website, Boost Your Broadband, to help people get faster broadband and save money.
On 1 July 2019, new rules will come into effect that will make it quicker and easier to switch mobile provider.