Customers will be told when their contract is coming to an end and be shown the best deals available.
New rules come into effect this month, which could save money for more than 20 million people.
From the 15th February 2020, phone, broadband and pay-TV providers must warn their customers when their current contract is ending, and how much they could save by signing up to a new deal.
Fairness for Customers
The new rules are part of Ofcom's Fairness for Customers programme, which is aimed at making sure customers are treated fairly and are offered the best deals available.
Benefits of the Fairness for Customers programme include:
- Fairer prices for broadband and mobile customers
- New end-of-contract alerts
- Protecting vulnerable customers
- Simpler switching
- Challenging firms to put fairness first
- Clear and honest information for broadband shoppers
Millions of pounds wasted each year
More than 20 million customers are already out of contract – including 8.8 million broadband customers, many are paying more than they need to.
Research shows that every day, 25,000 broadband customers come to the end of their contract, and this usually leads to an automatic price rise.
How will the new notifications work?
Customers can make significant savings if they take advantage of some of the discounts that are available on signing up to a new deal.
One issue is that around 16% of broadband customers don't know if they are in-contract, and this figure increases to 21% for the over 55-year-olds.
So, Ofcom has introduced rules to make phone, broadband and pay-TV service providers contact their customers between 10 and 40 days before their contract ends. These alerts can be sent by text, email or letter, and they must include:
- Your contract end date
- How much you currently pay
- How much you'll pay once your contract has ended
- The notice period for leaving your current provider
- Best deals from your current provider
- Prices for deals that are only available to new customers
If you are already out of contract, your service provider must remind you about this, and they will also need to tell you every year about their best deals.
How much can people save by taking out a new deal?
Out-of-contract broadband customers could save an average of around £100 a year by agreeing to a new deal with their existing provider.
Some customers could save £150 or more, depending on their provider, and this doesn't include savings people could make on their TV package.
Around 3 million out-of-contract broadband customers could upgrade to higher-speed broadband packages with their provider, and pay less than they do now.
Among mobile customers who buy a handset and airtime bundled together in a single contract, 1.4 million customers could save money by switching to a cheaper 'SIM-only' package at the end of their existing deal.
Thoughts from TTNC
Although long overdue, we very much welcome these changes as we believe there are too many companies whose business model revolves around locking people into contracts and making it difficult to switch to another provider.
Customers deserve to be treated fairly at all times, and these new rules will go a long way in helping protect people, especially vulnerable people.