Direct Save Telecom Slams Big ISPs for Downplaying Contract Escape Clauses

Internet and phone provider Direct Save Telecom has accused some of the UK markets biggest broadband ISPs of “purposely downplaying the contract escape clause” so as not to risk losing customers while simultaneously enforcing “substantial” price rises.

Several of the markets largest providers including Sky Broadband, BT, TalkTalk and Virgin Media have already announced significant price rises to phone calls, line rental and other services. Some of these increases have already been introduced, while others will not begin until January or February 2013.

Ofcom’s existing rules state that any customer tied into a lengthy contract has the right to change supplier, without penalty, if their current provider makes a change to the contract that is of “material detriment“. Some of the recent price hikes have fallen into this category but DST claims that many ISPs are failing to highlight it.

Stavros Tsolakis, CEO of Direct Save Telecom, said:

“When prices increase, notification should be sent out to every customer informing them of the changes and giving them the option to get out of the contract. However, I have spoken to many non-Direct Save Telecom customers recently who simply do not know about this rule.

At the very least, many providers are under playing this contract release clause resulting in consumers missing out on the opportunity to reduce an important household bill. In some of the letters which have been sent out, the text informing the customer about the get out clause has been so small that you need a magnifying glass to read it.”

Tsolakis admits that “price increases in the telecoms industry are inevitable” and notes that this is “the only time the big players in the market feel vulnerable to the smaller providers who continually offer cheaper rates“. In reality many smaller ISPs tend to actually charge more (varies between service types) and switch their focus towards quality instead of raw affordability.

Ofcom are currently investigating the problem of unexpected mid-contract price rises and have previously promised several adjustments to its rules by the end of this year, although the window for that is rapidly beginning to close.