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Telecoms firms urged to waive termination fees for struggling customers

Emma Lunn
Written By:
Emma Lunn
Posted:
Updated:
27/11/2023

The regulator has written to the bosses of all major telecoms firms urging them to introduce ‘social’ tariffs if they haven’t already.

Social tariffs are cheaper broadband and phone packages for people claiming Universal Credit, Pension Credit and some other benefits.

Where providers don’t have a social tariff, Ofcom said it expects them to waive any early termination charges for customers struggling to pay and wishing to switch to a social tariff from a rival provider.

The regulator has repeatedly said that more needs to be done by the industry to promote social tariffs and make them easy to access. Its latest research found that only 9% of eligible customers who are aware of social tariffs said they first heard about them through their provider.

As part of its cost of living action plan, Ofcom has called on providers to “actively promote” their social tariffs, including targeting those eligible households likely to be most in need of support. It said that providers should be using their own communications channels to highlight social tariffs, including end of contract notifications, and social media campaigns.

The regulator also said that customer service teams should be fully briefed on social tariffs and empowered to suggest them to customers who are struggling with their bill, or if they present as financially vulnerable.

Earlier this week a study by Broadband Genie accused telecoms firms of hiding social tariffs, backing up similar research by YourMoney.com last year which found that social broadband deals were virtually impossible to find on the websites of some major providers including BT and Sky.

The watchdog is summoning representatives from the providers to update on the progress they are making regarding provision and take-up of social tariffs, and will publish take-up of social tariffs by provider in its annual pricing trends report, due later this year.

Inflation-linked mid-contract price hikes in the spotlight

Ofcom’s cost of living action plan update also includes preliminary research findings into customers’ awareness and understanding of inflation-linked in-contract price rises. By December, it will publish the findings of its review of inflation-linked price rise terms, alongside further research on customers’ experiences, and seek views on whether it needs to change the rules.

The majority of mobile and broadband providers link their annual price hikes to the rate of inflation. This means they are allowed to hike prices, even if someone is in the middle of a contract. Research by Uswitch found that four in five adults say mid-contract price rises are unfair.

Melanie Dawes, Ofcom chief executive, said: “We’re expecting more from the industry as a whole in helping to support customers through the cost-of-living crisis. That means no more excuses when it comes to offering and promoting social tariffs to eligible customers who could switch and save today.”