Broadband News

Ofcom gives providers nine months to implement end of contract letters

A major concern from some quarters in the last year or two has been the public forgetting that their minimum contract terms (usually 12, 18 or occassionally 24 months) ending and that an introductory price offer ends and a much higher standard price would apply. Ofcom has now moved to try and make sure that broadband customers now how much their standard price will be at the end of the minimum term and what their options are.

The notifications from the existing provider will arrive 10 to 40 days before the end of existing contract and can be sent via text, email or letter. The end of contract notification must include

  • Details of best deals from the provider (including those only for new customers)
  • What the standard price will be if they remain
  • The price they are currently paying
  • Whether any services will end when the minimum term ends
  • Length of notice period needed - though for the vast majority serving notice via a migration is sufficient

The customer has three options, migrate away, sign up to a new contract or remain paying the standard price. These three options are nothing new and other than the savvy customer who phones up and negotiates a deal better than those on the able are pretty much what people do now, other than those who let their contract lapse into the standard term.

Ofcom research suggests some 20 million customers have passed their initial contract, so the broadband switching industry will be gearing up for 15th February 2020 when the first notifications should be received. The first contact is so far away to give broadband companies time to get their notifications working.

One side effect of this may be that new customer offers edge closer to the standard pricing, though as we have seen already this does not always mean a price increase e.g. the BT Broadband Essential package where the standard price dropped from over £40/m to £25/m recently.

What we don't know at this time is whether the detail of deals for new customers will mean just the pricing or will things like free gifts and rewards need to be specified. The value of some of these deals make a serious dent in the monthly price once you factor in the savings.

Ofcom's new rules will make sure consumers know when their contract ends, and help them save money by switching to a better deal. For too long, large numbers of loyal consumers have been paying too much for their telecoms services, which is why we've also strengthened Ofcom's powers to create a fairer and more transparent system.

Minister for Digital Margot James on Better Deal for Customers

Comments

Can't help feeling this as usual is less about the interest of consumers and more about the commercial interests of the make-works who justify their existence, and correspondingly high incomes, from mutual back-slapping rather than anything productive. A British habit. There's nothing in the Ten Commandments or law that forces consumers to play games. Unfortunately for some people.

  • mervl
  • 6 months ago

I'm not sure why Ofcom gives them 9 months to implement this measure, at the moment providers have systems in place which knows when the contract ends, does it take that long to sort it out?
Still at least it's an improvement.

  • burble
  • 6 months ago

I'm sure it will take the likes of Plus Net a whole lot longer than nine months to implement this :-)

  • R0NSKI
  • 6 months ago

Agreed. In fairness, six months ago Plusnet assured me they would advise when my new two-year contract was due to end. Then they screwed up the billing as usual on any renewal, taking two months to sort it out. Main thing was the BB was not interrupted and has been faultless for the five years since I joined them.

  • mike41
  • 6 months ago

One thing that people will need to be careful about is whether the best new deal is missing some components of their existing deal e.g. some of the price drops of late have been removal of Evening and/or weekend inclusive landline calls.

Add to that if the new deal means a new contract - we will end up with a market where people cannot easily switch providers when new services appear in an area.

  • andrew
  • thinkbroadband staff
  • 6 months ago

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