The rules come into effect on 15 February and are set to benefit 20 million customers who don't realise they're on out-of-date contracts
Broadband, TV, mobile and home phone companies now have to tell customers when their contract is coming to an end to avoid consumers paying more than they need to.
The rules, announced in May 2019, come into effect on 15 February and are expected to benefit around 20 million customers who don’t realise they’re on a contract they could have already left. Often new customers are given better deals, or there are cheaper contracts that offer the same features.
Under the changes, which are being made to Ofcom’s Fairness for Customers Programme, the provider will also be required to offer the same deals to new and existing customers, and tell the customer if they can get the same feaures for less.
In fact, figures from Uswitch suggest mobile and broadband consumers could be £1 billion a year better off if they take the opportunity to move to a better value deal.
These changes apply to both private and business customers, but only those with contracts that come to end after 15 February will be notified. If a customer is already out-of-contract, they will have to manually check if they can save money by renewing, or whether switching to a new provider would be more cost-effective.
The only requirement the providers have for these customers is to send them a letter annually, informing them of the best deals.
Ofcom “end-of-contract” alerts
Under the changes, providers will send information about a customer’s current contract, as well as notifications on the best deals available anywhere between ten and 40 days before the contract period ends.
The alerts, which will be sent by text, email or letter, will have to include:
- The end date of the contract
- The price paid before this date
- Any changes to the service and price paid at the end of this period
- Information about notice periods needed to before they can end a contract
- Best provider deals on offer, including letting long-term customers know what prices are available to new customers
Those who decided to stay in their current contract will also be sent a reminder about the firm’s best deals every year. It’s hoped that the changes will enable customers to shop around more effectively and choose the best package to suit their needs.
Lindsey Fussell, Ofcom’s consumer group director, has said the change “will put power in the hands of millions of people who’re paying more than necessary”.
While this is definitely a win for customers, providers will not be required to tell people about offers from rivals, so this new rule might not necessarily get you the best deal. It will give you a heads up, though, and that’ll give you time to check out contract options from other providers.
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According to the communications watchdog, approximately 14% of people have no idea whether or not they’re still in a contract, while 12% believe they’re in a contract but don’t know when this period comes to an end.
If you want to check a contract now but don’t have the original paperwork, you can call your provider for full details, including your contract end date and their latest deals. If you are out of contract, don’t feel obliged to stay with the provider – shop around for the best deal for you.
Matt Powell, Editor at Broadband Genie welcomes the changes: “Until now, providers have been content to allow loyal customers to pay a great deal more than new subscribers. Many broadband deals are sold with discounts for the initial contract term, and although these are often good value for the first 12 or 18 months the cost after the discount ends can be substantially higher.
“Regularly switching will let you take advantage of the latest offers, and perhaps get you a faster connection. And if you don’t want to switch you should always negotiate with the provider at the end of your contract term to see if a better deal is available.”
Richard Neudegg, head of regulation at Uswitch.com, added: “For years, providers have profited from not always being entirely transparent about the status of their contracts. The introduction of end-of-contract notifications and annual out-of-contract reminders should finally put an end to this murky practice and help consumers know the best time to consider their options.”