TV, phone and broadband customers to receive ‘out-of-contract’ alerts
Proposals from the communications regulator, Ofcom, say broadband, landline, mobile and TV providers should remind customers their minimum contract period is coming to an end.
It suggests customers should be alerted 40-70 days before the contract ends, via a text message, email or letter.
The alert would need to include any changes to the price or service, as well as the options for customers, including that they could save money by switching elsewhere.
According to Ofcom, more than 20 million customers are outside their minimum contract period, and more than 10 million are on monthly rolling deals where they’ll be slapped with an automatic price increase at the end.
As a result, the regulator said millions of telecoms customers “could be paying more than they need to”, with those who bundle broadband and landline services paying an average 20% more when out of contract.
Ofcom also wants providers to send a one-off ‘out-of-contract’ alert to all existing customers who are out of the minimum period.
Lindsey Fussell, Ofcom’s consumer group director, said: “We’re concerned many people are paying more than they need to – particularly those who are out of contract.
“Customers have told us they want to be alerted when their phone, TV or broadband contract is coming to an end, and get advice on their options. Under our plans, providers would have to do exactly that.”
‘Money down the drain’
Richard Neudegg, head of regulation at comparison site, uSwitch, said uncertainty over contract dates costs consumers £40 every second in overpayments.
“Ofcom needs to stick to its timetable. It is currently proposing to take ten weeks to consult before it goes through the process of making a final decision. With a likely implementation period of six months, we could be waiting at least a year before we see any changes – and all this time consumers in expired contracts will be continuing to throw their money down the drain,” he said.
“Telecoms providers have avoided giving out this information for years. Ofcom needs to make sure that there are no loopholes in its proposals, to ensure they are as helpful to these consumers as possible, and do not allow important details to be hidden in the small print.”