UK: Telecoms and TV firms will be compelled to tell customers when contract is ending

One of the ways ISPs and pay-TV firms manage to make a buck out of customers is by enticing them in with attractive contracts and then leaving them to lapse into higher payments if they forget to pick a new contract or choose another supplier. New rules announced by the regulator, Ofcom, will put an end to this practice - next year, providers must tell their customers when their contract is about to end and they must also tell customers about the best deals they have on offer.

The move is just the latest attempt by Ofcom to improve the overall customer experience for those looking for broadband, phone, and TV service contracts. In the last couple of years, the regulator has made providers more accurately describe what internet speeds their packages deliver, and they also have to show potential customers a unified cost rather than splitting the cost of the broadband and the telephone line rental costs individually.

Under the new rules, companies will have to give 10 to 40 days notice that their contract is about to come to an end. These notifications can be sent by text, email, or by letter. The notification 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.

Ofcom estimates that 20 million customers have gone beyond their initial contract period and that many of these will be paying more than they ought to be. The regulator found that costs for landline and broadband bundles go up by 20% or more when out of contract and that when pay-TV is added the amount rises by 26%. Ofcom’s research showed that a lot of people were unsure when their contract ends and some still thought they were in the contract when, in fact, they weren’t.

In a statement on the matter, 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.”

Ofcom has announced that it is giving businesses nine months to make the necessary changes to their systems and processes, therefore, customers will not begin receiving these notifications until February 15, 2020. Once the scheme begins, those who stay with their current provider without signing a new contract will be sent a reminder every year with details about the firm’s best deals.

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