Internet and phone users are to get end of contract alerts.
Broadband, pay-TV, mobile phone and landline customers will have to be told when their contracts are about to end. And then be informed of their providers’ best alternative deals, under new rules.
The UK’s communications watchdog Ofcom is aiming to help users overpaying.
Up to 20 million people have stuck with subscriptions beyond their lock-in, and they often do not realise.
And for those people that opt not to move to another package, they need to be reminded they can still do so on a yearly basis.
It was July 2018 when the watchdog first announced its plans. To help people secure end of contract deals. Companies have nine months to update their systems and must start sending out the notifications from 15th February 2020.
Service providers will need to text, email or send a letter to their consumers between 10 to 40 days before their contracts come to an end saying:
- the date their contract can be terminated without a penalty
- the price they have been paying
- any changes to the price or service that automatically come into effect after the date
- how much notice they need to give to cancel the deal
- the best alternative subscriptions on offer, including the prices charged to new customers
Millions of people paying more than necessary.
Lindsey Fussell, Ofcom’s consumer group director said “This will put power in the hands of millions of people who are paying more than necessary when they’re no longer tied to a contract,”
Research commissioned by the regulator found that around 14% of customers do not know if they are still tied to their current contracts or not.
The research said that customers could typically cut the cost of a bundle of services by about 20%. By signing up for a new deal rather than remaining on a contract beyond its minimum period.
There are still concerns by some consumer rights organisations that the measures do not go far enough.
Citizens advice told Ofcom during the consultation that it believed providers should be made to send out more than one notification to each customer. And companies should also be made to disclose how many of their subscribers are out-of-contract and how much extra on average they are paying compared to in-contract users.
“Almost nine in 10 people think that charging loyal customers more is unfair.
“We look forward to hearing about the concrete actions Ofcom will take to end this systematic scam.”
A trade group is also concerned that small internet providers who specialise in serving business customers will struggle with the cost and complexity of being able to adapt their systems to meet the rules.
There is a concern at the lack of clarity around small business customers because it seems not to take into account the scale and nature of this market a spokesman for The Internet Services Providers Association said.
“We hope that Ofcom will address this going forward.”