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Telecoms firms told to avoid ‘pay up or no service’ threats

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Telecoms firms have been told to avoid threatening customers with service restrictions if they don’t pay outstanding bills.

Around 1.1 million households (5%) are struggling to afford their broadband but this figure rises to around one in 10 among the lowest-income households.

Given these figures and the fact that affordability is likely to worsen this year, the regulator Ofcom has set out a number of proposals for phone and broadband firms requiring them to offer better support to people suffering financial hardship.

As part of Ofcom’s plan to update its ‘Treating vulnerable customers fairly guide’, it expects telecoms firms to avoid imposing service restrictions to force payment.

It said: “Restricting or disconnecting the services of someone who is particularly reliant on them – to push them into paying outstanding bills – should be avoided or limited. And steps should be taken to understand a customer’s individual circumstances before instructing debt collection services. Any agencies used should have strong policies for treating vulnerable customers fairly.”

Firms should emphasise the help and support available to people struggling to pay which could include offering and promoting special discounted packages to financially vulnerable customers. Moving to one of these ‘social tariffs’ could save people an average £144 a year on their broadband bill.

Ofcom said providers should also proactively signpost other support options, such as deferring a payment or setting up a payment plan. Further, any communication to customers in arrears should include information about free debt advice. This communication should also be across letter, email, phone and text.

Lindsey Fussell, Ofcom’s network and communications group director, said: “Phone and broadband are vital to our lives, but many households’ budgets are being seriously squeezed. So it’s crucial that people who are struggling to afford their bills get the support they need.

“We’ve set out clear expectations on the steps providers should take, and we’ll be keeping a close eye on firms to make sure they’re treating customers fairly.”

Ofcom is now welcoming feedback on the proposals until 12 May 2022, adding it intends to publish a final decision in the autumn.

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