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