Broadband, phone and media firms must inform customers about best deals

Broadband, phone and TV (Media) customers must be told when their contract is coming to an end, and shown the best deals available, under new rules announced today by Ofcom.

Ofcom wants customers to be able to take advantage of choice in broadband, phone and TV, and get the best deals for their needs. This could be by switching provider or agreeing on a new deal with their existing one. To help people do this, we are requiring broadband, TV, mobile and home phone companies to send their customers the information they need about their contract, when they need it, so they can choose the best package for them. These protections are the latest in Ofcom’s Fairness for customers programme.

Ofcom research shows that more than 20 million customers have passed their initial contract period. Many of these could be paying more than they need to.

People who bundle their landline and broadband services together pay, on average, around 20% more when they are ‘out of contract’. This rises to 26% among customers who bundle their pay TV with these two services.

Around one in seven customers (14%) don’t know whether they are still tied to their original deal; and around one in eight (12%) believe they are ‘in contract’, but don’t know when this period ends.

Ofcom has stepped in to ensure fairness for customers, by forcing telecoms and pay TV companies to warn customers between 10 and 40 days before their contract comes to an end. These alerts will be sent by text, email or letter. They will include:

• the contract end date;
• the price paid before this date;
• any changes to the service and price paid at the end of this period;
• information about any notice period required to terminate the contract; and
• the best deals offered by their provider, including telling loyal customers what prices are available to new customers.

People who choose to stay with their provider without signing up to a new contract will be sent a reminder every year about their firm’s best deals.

Lindsey Fussell, Ofcom’s Consumer Group Director, said “We’re making sure customers are treated fairly, by making companies give them the information they need, when they need it. This will put power in the hands of millions of people who’re paying more than necessary when they’re no longer tied to a contract.”

The changes will involve providers sending personalised and tailored information to millions of individual customers. To make sure they get this right, companies will have nine months to make the necessary changes to their systems and processes. Customers will start receiving the notifications from 15th February next year.

The Ofcom Fairness for customers campaign has also recently introduced:

• money back for broadband and landline customers when things go wrong;
• clear, honest information for broadband shoppers – before they commit to a contract – about what speeds they will get; and
• a major information campaign and website, Boost Your Broadband, to help people get faster broadband and save money.

The new rules will come into effect on 1st July.

“We all lead busy lives and it is easy to forget the exact date your mobile, broadband, TV packages, or landline contract expires. Companies have been exploiting this forgetfulness for years, enticing people with great deals and then rolling them on to rip off packages upon the deal’s expiration. Knowledge is power, and households receiving formal notification that their contract is going to end should act as a trigger to get people shopping around and selecting the best deal for them in the market.”

“A note of caution – these notifications need to be crystal clear and designed for easy comprehension. The regulator and all interested parties should keep a close eye on them to ensure that they are fit for purpose.”