Ofcom’s New Broadband Switching System May Clash with 14 Day Cooling Off Period UPDATE
The MD of UK ISP Andrews & Arnold (AAISP), Adrian Kennard, has today pointed out another potential issue with Ofcom’s new One Touch Switch (OTS) system for quicker and easier switching between broadband providers, which could conflict with the statutory 14-day cooling-off period.
The Consumer Contracts Regulations 2013 currently require a 14-day cooling-off period, which affords consumers the right to cancel their service contract within that period, although some costs may still apply to doing this (i.e. it’s not to be treated as a free trial).
For example, customers of BT’s broadband service are told: “Once you place your order you can cancel anytime up to 14 days after your service starts, or when you receive your equipment (whichever is later). You need to return any equipment we’ve sent you.” But BT’s terms do caveat that “If we’ve already started providing a service, you’ll have to pay us the full cost of the service you’ve had.”
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Similarly, A&A’s terms state: “For services, the cancellation period will expire after 14 days from the day of the conclusion of the contract (i.e. when we accept your order). However, ordering services as soon as possible, or for a date within 14 days of order means your right to cancel will expire once the service is provided within 14 days of order, even if you are not yet using the service provided.”
In addition, section 36 of the act also provides a facility for consumers that do not wish to wait 14 days for a service to be performed. It specifically allows a consumer to make an express request, in a durable medium, for a service to be performed within the 14 days, and waive their right to cancel within 14 days if the service is performed (i.e. you can still cancel if the service is not performed and only pay for the part of the service that has been performed, in proportion).
However, Adrian’s latest blog notes that section 36 is at risk of running into a bit of a conflict with OTS and broadband services more widely, which requires internet providers to action switches within just 1 day “where technically possible“ (instead of 10 days under the old system).
Adrian Kennard said:
“However, this wording does not fit well with a service such as broadband/internet. The problem is that such a service is installed and then ongoing, possibly even with a minimum term. The supplier has costs for arranging the installation, and may well have commitments with circuit providers for a minimum term.
If a customer cancelled after the installation was complete and the service is working, but within 14 days, the supplier has to charge in proportion. For a 12 month term, that is a fraction of the costs to the supplier. Indeed, with services on 12 month term it is common for a free installation to be offered, which is another cost for the supplier if cancelled within 14 days.
As such broadband service provision invariably has a 14 day cooling off period, denying the consumer the option to have an installation done sooner.
…
Until now, for most broadband/internet installations, either a new circuit had to be installed (which takes time), or a migration is done with a carrier such as BT Wholesale. BT Wholesale have, to date, enforced a 14 day delay in migrations. So 14 day cooling off period is effectively enforced.
However, a new initiative by OFCOM has changed things. This takes effect 12th Sep 2024. As a result, BT Wholesale are dropping the 14 day minimum lead time on migrations. OFCOM are trying to encourage switching of broadband to be easy for consumers, indeed, the wording of the OFCOM general conditions means a provider has to provide a service as soon as technically possible if the customer expressly requests it, which may be within that 14 day cooling off period.
The fact OFCOM are, in effect, insisting operators allow customers to request services sooner creates a serious problem for providers. If nothing else, a free installation type service would not be sensible (again, to the detriment of the consumer). Even if a provider chose not to fully adhere to OFCOM GC, and insisting on a 14 day cooling off time, this effectively denies the consumer an option. But the wording of 36(2) of the regulations means an Internet provider will not be willing to offer quicker broadband switches without significant risk.
I stress that a consumer has to make an express request for a faster install, in a durable medium.”
Adrian is currently writing to his MP in the hope of getting the legislation tweaked to better reflect the realities of modern broadband provision and the new migration system. But any such changes will probably have to wait for the government to conduct another major review of such consumer contract protections. But even if such a change was accepted, it could still take several years to run the usual course of debates and implementation.
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“We’d love to offer the full range of options, including cheap or free install on a 12-month term, along with service provided even next day when possible. But at this point, such options are a risk for small providers and ultimately will reduce consumer choice,” claimed Adrian.
UPDATE 7th Aug 2024
A spokesperson for Ofcom told ISPreview: “Any changes to The Consumer Contracts Regulations would be a matter for Government.”
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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Adrian hits the nail right on the thumb!
It’s good for the customers…. Why give us 14 days to cancel without even trying your service, i think the OTS 1 day service will allow customers to test the network and if its bad, they can leave within 14 days:)
As the article already says, when the rule is applied to “services” it does not exist to act as a free trial and costs may still apply when you cancel.
ISP’s should let customers trial then before putting people on 24 months contracts or something horrible.
That is the problem, the regulations are not there to provide a “free trial”, and they never were. They allow a trial of goods, because goods can be “sent back”, but not services.
They are there to allow cancel *before* service provided. A chance to change your mind. Once provided the right to cancel stops.
Well, it does for most services as the service is provided. The wording is not so clear for an “ongoing service”, hence the problem.
The very fact you think it is for “try the service for a day and cancel if you don’t like it” is the problem. For example, BTW have a 12 month minimum term on FTTP, even for migration, so if you did that the ISP pays the install/migration AND 12 months term, but gets to charge you for a day. You see the problem?
Ideally the regulations need to apply the same for ordering broadband as for ordering a service like installing a dishwasher – your right to cancel is BEFORE the service is performed, not after.
It is all about being fair – once the service (i.e. the installation and commitment to term) is provided you can’t cancel under the 14 day rules. You can obviously cease, but that may have early termination charges, etc, as agreed.
Not sure I agree. You can very definitely cancel insurance within the first fourteen days of commencement.
Besides, it’s good for consumers to be able to actually try the service for a little bit of time. If the broadband line or phone signal isn’t fit for purpose, it’s much easier to cancel under a cooling off period, than seek any other contractual remedy.
The problem isn’t the cooling off period; it’s that wholesale pricing structures aren’t suitable, given that cooling off periods have existed for decades.
Do you see a lot of people cancelling within the cooling off period? Enough to mean you’d have to increase charges for everybody else to cover the costs?
@Iain – Very different to insurance products…. (1) The insurance provider will only have to eat their internal admin cost and any payments to re-insurers or underwriters will be reduced, as opposed to 12 month wholesale contracts, and (b) You can generally only cancel insurance if you have NOT made a claim, or have NOT carried out the activity which it covered….
Try before you finally buy is complex.
It’s got to be the case that some things can easily be trialled and others can’t.
Test driving a car places a small amount of wear on the vehicle. It will often be keep for tests and sold with a sever miles on the clock later on at a lower price
If you buy a TV from a well known catalogue shop and take it back because you don’t like the sound, they can’t sell it as new. They must cover the costs over all the other sales and try and recoup the money with a A/B grade refurb.
If you try clothes on in a shop changing room, they can go straight back on the shelves if the don’t fit.
If you take out insurance and don’t claim, then within a cooling off period the loss to the company is their setup and acquisition cost.
As an ISP, provisioning everything needed for your service is going to cost considerably. If you then cancel after a short while there’s no way to recoup the cost. The come back is only there if it doesn’t meet advertised criteria, e.g. minimum guaranteed speed.
Cancellation of physical products can also be limited in practical terms. If a builder put up a garden fence you wouldn’t expect them to take it back because you changed your mind and wanted a hedge. Technically the fence panels could be un-slotted, but you can’t ‘undo’ the labour or in concrete the pists.You’d only have resource if it wasn’t the height or location or material agreed in the contract.
@RED, but specifically for home insurance, having coverage is the using the service. And you’re unlikely to have made a claim in the first fourteen days. Agreed, the wholesale costs are ridiculous, but again that’s a wholesale issue.
@Just a thought, agreed this can be complex. For goods, the retailer can charge you the amount of value diminished by you opening the packaging. I think it goes without saying that it’s fair for the home broadband user to be charged pro rata costs, for the time they use the service.
Why not to have paid installs and reduce proportionally the monthly fee (say if the installation is £120 then the monthly charge is reduced by £10).
Equally, if this is a switch from one ISP to another, same technology etc. then the “installation” cost should be negligible.
Perhaps a better idea would be to charge the first 3 months of service up front as an “installation charge” and then offer the first 3 months free? If the consumer cancels then they would only be entitled to a refund of the installation charge if the installation was not completed.
Surely providers can reword their terms to claim any costs back from the consumer so if they cancel before any installation or service is started it’s a full refund of anything paid; if the cancellation takes place after installation then the consumer is liable for costs incurred + days of service provided.
It would maybe require them to split the contract into ‘Hardware’ (installation + router + line rental) and ‘Service’ costs in a similar way that most mobile networks now split handset and airtime contracts.
A change like that could also allow providers to give consumers the opportunity to pay a chunk of the ‘Hardware’ portion upfront to reduce their monthly costs (Could even offer slight discount for those paying more upfront similar to what Plusnet used to do with it’s Line Rental Saver product before they were forced to merge line rental into the service cost)
Or why not just make it very clear and obvious. You have 14 days from when the service goes live to change your mind. You must then switch your services away within another 14 days. But you would be liable for any charges for the service within the period [unless one had no service].
Lots of great suggestions, but there are problems even so. Thanks for trying to be constructive though, really.
One cannot simply make terms that change the statutory provisions, and as worded now, they are not clear enough that an ISP can say you are tied to 12 months once installed, if cancelled within 14 days of order. The regulations seem not to consider an ongoing service.
Yes, it should be cheap to migrate, except BT Wholesale, even now, even though their underlying circuits do have this, make the smaller ISPs that use them, pay for a minimum 12 month term migrating in an FTTP service.
If the costs were low enough, if not paying for install/migrate AND 12 months, it could be simply covered by install/migrate cost and some averaging out – that would be best option. But it is not so simple,. sadly. It would be good for customers if that was the case, yes.
We need the underlying carriers to offer service with a correct (covering their cost) install and no minimum term, that then gives ISPs the most options to cover this, and allow simple and quick “switching”.
But one of the very first comments on here shows the issue – someone thinking (wrongly) that the idea of the 14 day cooling off period is to allow someone to try out a new service then cancel. If enough people feel that way it impacts prices for everyone, disadvantages small ISPs that cannot easily absorb the costs, and causes problems.