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Ofcom set to curb unfair communication charges

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Ofcom has revealed proposals to curb unfair additional charges levied by communications providers on consumers’ bills.

The proposals are designed to ensure that extra charges are fair and that landline, broadband, mobile and pay-TV providers clearly market the true cost of their services.
Increasing competition has driven down headline prices and offered consumers more choice. However, falling headline prices are not the whole picture.

Consumers may also pay additional charges as part of complicated contract terms. Some providers make a range of additional charges, for example, when consumers choose to pay by cash or cheque rather than by direct debit, cancel a contract before the minimum period has finished, or make a late payment.

Ofcom is proposing to introduce new guidance for communications providers. This will spell out Ofcom’s view of the law and what communications providers have to do to meet their obligations under the Unfair Terms in Consumer Contract Regulations 1999 to ensure that additional charges are fair and transparent.

Once the guidance has been finalised, Ofcom is proposing to give communications providers three months to comply. Ofcom will then start an enforcement programme – where necessary through the courts.

Ofcom chief executive Ed Richards said: “Consumers are benefiting from greater competition and lower prices. But for consumers to get an all round fair deal they need to know the full costs of the services they are buying.

“Our proposals will encourage companies to be open and straightforward about additional charges where they feel it is necessary to include them. In addition, our proposals mean that, in some cases, additional charges will be subject to clear limits which would provide direct protection for consumers.”

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