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Ofcom Prep More Contract Clarity for Broadband and Mobile Consumers

Friday, April 27th, 2018 (11:02 am) - Score 790

The UK telecoms regulator has hinted that it intends to improve “end of contract notifications” for phone, mobile and broadband consumers, which among other things could require ISPs to “proactively inform” customers when they are approaching or are at the end of their minimum contract term.

Last summer Ofcom began a new consultation that was designed to improve consumer engagement and switching (here), which partly covered for the fact that the regulator had at the same time buried an earlier proposal that might have made it easier to switch between separate broadband network platforms (e.g. Openreach, Virgin Media and KCOM).

Instead the regulator sought views on how to improve the UK market so that consumers are more likely to become “engaged” and swap around. Since then Ofcom has conducted additional research (here) and this revealed that some people are still unsure whether they are within their minimum contract period, or when their contract ends.

In response they’ve decided to tackle issues of consumer engagement in a phased approach and their first phase will examine end of contract notifications.

Ofcom Statement

“In the first phase of our work to increase consumer engagement, we are focusing on ‘end of contract notifications’ – whereby providers would proactively inform customers when they are approaching or are at the end of their minimum contractual term. We aim to consult on proposals in July 2018.

This will be followed by a second phase of work, which will consider other reasons why some consumers may find it difficult to shop around – such as understanding their usage requirements, or navigating the range and complexity of deals and packages available – and potential ways to address these.”

We should point out that some ISPs already notify consumers when their contract is nearly at an end, although this certainly isn’t universal and many will simply leave the onus to their end-users. Suffice to say that it’s easy to forget such dates after you’ve signed-up, which is a problem because some providers can charge significantly higher post-contract prices.

As usual we’ll be keeping an eye on this and will report back once the regulator has put some concrete proposals on the table. Requiring ISPs to notify their end-users would certainly be a reasonable place to begin.

Leave a Comment
9 Responses
  1. Avatar Meadmodj says:

    This issue needs to be addressed.

    In addition to my BT broadband during 2017 I also had Virgin Media Full House package on a special offer which included VIVID 100 upgraded free to VIVID 200. When the package was nearing its end I had no reminders from VM and had to proactively contact VM myself. The package was £55pm but leapt to £78 at the end of the 12 months. I tried renegotiating and was offered £65pm which I declined and ceased my contract. However the earliest cessation date had to be 30 days even though I said I didn’t need the service from the date I called. So I ended up paying the higher rate for a another month. I then completed the origami package to return the kit. A week later adverts appeared offering the basic TV package with VIVID 50 upgraded free to VIVID 100 for £29 per month.

    It is most disappointing that along with Car Insurance, Energy and other industries we have to go through this annual ritual of comparing prices. Whether it is VM, BT or the parasite ISPs it must be costing them money in marketing and administration.

    The other issue is the automatic rises inline with RPI which I consider as having no bearing on the costs experienced by ISPs within a technology industry where the return on the assets should become cheaper over time.

    1. Avatar wirelesspacman says:

      “…where the return on the assets should become cheaper over time.”

      Huh? Sorry, don’t follow you there.

    2. Avatar Meadmodj says:

      Sorry badly explained and I am no accountant only taking a simplistic view.

      The ISP running costs are not the same profile as those defined for the RPI and therefore price rises should be based on only the elements that do impact the industry such as energy cost.

      The assets will return over a fixed period and at some point will have been written off so the costs of utilising those assets should come down or be the same not rise. So for example by now ADSL infrastructure and the original LLU should be written off. There will be maintenance of the plant but the RPI rise is applied to the infrastructure (Openreach) and the ISP costs. Recently Ofcom reduced the Openreach charges and the cost of both FTTC and Fibre technology is also reducing.

      I just don’t see why Ofcom allow the ISPs to apply automatic rises based on the RPI index. My view is there should be a steady reduction in broadband charges or improved services/speed for the same price.

      Unless I am missing something.

    3. Avatar Meadmodj says:

      Correction looks like BT is between CPI and RPI but the same applies

    4. Avatar Kits says:

      Or you could join a smaller ISP that doesn’t put the price up when contract ends, only time the price changed for me was when I changed packages. Over the years have changed package three times, I have been with this company about 10 years now.

  2. Avatar adamjarvis says:

    It’s come to light that BTGroup – (BTRetail via BTWholesale/Openreach) is “double charging” one day’s line rental on the migration day so both the losing provider and the gain provider charge line rental on the day of transfer (ironically you pay double line rental on the day your actually have little to no service), this is contradictory to Ofcom’s stated policy of migration being free.

    This is especially apparent when the gain provider is EE Broadband/Plus.Net (resold BT Products in all but name).

    It might only be 0.63 pence extra, but over millions of people migrating their broadband each year, it seems to have been missed by Ofcom, and is a nice little earner for BTWholesale/Openreach, which BTRetail, plus.net, EE then invoice.

    For Ofcom to miss this billing error shows how useless the regulator is, regards the consumer.

  3. Avatar Alan says:

    Twice now, PlusNet have renewed my 18 month contract without any prior warning
    On the first occasion I complained, I was told it was up to me to keep an eye on my account to see when the contract ends
    I wont fall for that a third time, as I only have 2 months left to run

    1. Avatar Kits says:

      Why people use ISP that force you into a new contract once you have completed the basic 12 months I do not understand. I am on a rolling monthly contract from when my 12 months was up at the same price I paid while in contract.

  4. Avatar Nic Elliott says:

    It’s so incredibly difficult to remember when your contract ends.

    If only someone had invented a system, either on paper, or electronically, where you could set a reminder on a future date…

    How about a bit of personal responsibility for a change? These measures infantalise consumers.

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