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Ofcom Force More Contract Clarity for UK Broadband and Mobile Users

Tuesday, July 31st, 2018 (10:11 am) - Score 1,926
contract notification letter example

The national UK telecoms regulator has today proposed new rules that will require phone / broadband ISPs, Pay TV and Mobile operators to inform customers when they approach the end of their minimum contract term, which might also help to encourage more switching within the market and save consumers money.

At present Ofcom states customers who bundle their landline and broadband services pay, on average, around 20% more when they are out of the minimum term for their contract and more than 20 million customers are currently outside their minimum contract period. On top of that more than 10 million are on deals with an automatic price increase at the end.

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.

ofcom_isp_contract_notifications_uk_summary

Suffice to say that it’s easy to forget such dates after you’ve signed-up. In response Ofcom has proposed to change things so that providers must now pro-actively inform their customers about the coming end of a contract.

The Proposed Notification

Under the regulator’s proposal, related notifications would be sent to all residential and small-business customers (i.e. 10 employees or fewer) who use services including landline, broadband, pay TV and mobile (either standalone or as a bundle). The notifications should be sent 40-70 days before the contract ends.

Providers would also be required to send a one-off ‘out-of-contract’ notification to all existing customers whose initial contract term has ended, and who weren’t given this information at the time. The notification itself would contain details of any changes to their price or services and let them know their options (upgrades, discount deals etc.).

Lindsey Fussell, Ofcom’s Consumer Group Director, said:

“We’re concerned many people are paying more than they need to – particularly those who are out of contract.

Customers have told us they want to be alerted when their phone, TV or broadband contract is coming to an end, and get advice on their options. Under our plans, providers would have to do exactly that.”

One important point, which isn’t mentioned in the press release, is that the new rules will only apply for any contracts that have a minimum term period of 6 months or more. “We do not consider that customers who take out monthly rolling (30-day) contracts should be included given the short minimum term for these contracts,” added Ofcom.

The regulator now intends to consult upon the proposals until 9th October 2018, before issuing a final statement. After that Ofcom envisages that consumers should start to receive end-of-contract notifications from 6 months after the date of their final statement, and that they should receive the one-off out-of-contract notification within 9 months.

An example of such a notification can be found below.

contract notification letter example

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Mark Jackson
By Mark Jackson
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 Twitter, , Facebook and Linkedin.
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41 Responses
  1. Avatar wireless pacman

    Just ban long term contracts – easy 🙂

    • Avatar wireless pacman

      Yeah, I know, pigs might fly! 🙂 🙂

    • Avatar Mike

      And then poor people will potentially have to pay a massive upfront cost…

    • Avatar Vince

      @Mike re: “And then poor people will potentially have to pay a massive upfront cost…”

      No they won’t. The kit supplied isn’t that expensive and frankly, they could stick the cost up by £1/month and cover it given the typical customer stays for years without new kit and ISPs pay nowhere near retail price for kit.

  2. Avatar Billy

    Better to ban churn inducing discounts and decide on a standard price to begin with.

  3. Avatar Kyle

    How about preventing one side of the party from increasing your contractual amount, during the minimum period? Much better and fairer for all. I’m amazed that this has been allowed to continue for so long.

    • Avatar Kits

      Choose the right ISP and there will be no change in charge unless you select a new product over 5 years on the price I started at only changed when I moved to FTTC.

    • Avatar Simon

      Then you would have to stop them selling it with that promise in the first place – the likes of BT TT and VM would be out of business

  4. Avatar Bill

    Is this actually true?

    I was certainly not notified by BT that my 12 month offer was at an end.

    • What’s not clear from Ofcom’s list is whether the ISP only sent a notification via postage or email. The latter could obviously become subject to spam filtering.

    • Avatar Vince

      @Bill … funny I thought that as no such notification was sent.

      I’ve had ones telling me how much more they’ll charge for the latest round of increases but nothing for the actual contract.

    • Avatar Simon

      When I was with them they used to put on the customer portal and hope you never logged in to see it – thats probably right

  5. Avatar Graham Long

    OFCOM yet again are missing a great opportunity to stop sales of Fake Fibre since they could also make IT a requirement of the ISP to inform the customer how their broadband is delievered into their property – but no, they even give an example of what the proposed notification would look like WITH A LIE IN IT: “Get the fibre superfast packsge” !!! This deciet has to stop. CONSUMERS DO NOT LIKE TO BE LIED TO! https://www.youtube.com/watch?time_continue=2&v=gpiqsXWYbgc

    • Avatar Gadget

      So at what point is it acceptable in your view to use the word “Fibre”? I’d assume that FTTB does not qualify as it is copper to the individual premises (and could conceivably have a longer patch than some FTTC)?

    • Avatar JamesMJohnson

      Acceptable use of the term “Fibre” is when it’s terminated within your premises.
      The exclusion would be when it’s clearly stated that it’s a copper/fibre hybrid.

      Think I’m onto something here… gonna advertise a new Fibre variant… “FTTE” – Fibre to the Exchange… oh, wait… thats ADSL.

    • Avatar Graham Long

      Yes and we all use copper lan cable or wifi to connect to our devises. It’s really very simple (as I have explained here before) …. Where the last word in the FTTX acrronym is something in which people actually live then it’s fine to call it fibre so X can be home, building, property, shed (if you live in one), caravan, castle, cave, tent, hotel, etc etc. No one lives in a Cabinet (as far as I know) so FTTCabinet could not be described as fibre…only perhaps as “part fibre”. One would think that even the ASA could understand this, but I don’t hold my breath on that.

    • Avatar TheFacts

      @GL – the actual performance is more important, end to end, than the delivery method.

    • Avatar Graham Long

      @TheFacts… and the best perfomance is only available on fibre! – QED.

    • Avatar Simon

      FTTGrass – sounds groovy!

  6. Avatar Skyrocket

    Ofcom should bring new laws in power eg:

    If you signed a new contract with the current price, it should remain the same price during your contract without increase it! SIMPLY AS THAT! If the ISP increase the price in half way of your current contract, JUST WRITTEN OFF THE CONTRACT WITHOUT NO FEE and renewal new contract with a new better deal.

    • Avatar Mike

      Then the initial price will have to be higher to insure against costs rising during the contract for the supplier.

    • Avatar Simon

      Yes! OFCOM should bring in a new code of practice which ISP’s can sign up to and do this very thing!

      Oh wait…..

  7. Avatar New_Londoner

    Perhaps it’s just me but surely it’s up to the people signing the contracts, all of whom are presumably adults, to take responsibility for understanding what they are contracting for and for what happens at the end of the contract.

    Does it really need the government to get involved, why not put the onus on the purchasers to look after their own interests? By all means protect vulnerable groups but the rest of us ought to be able to do this for ourselves – if not, are we sufficiently competent to sign the contracts in the first place?

    • You could perhaps argue that since the vast majority of us do not read the detail of such consumer contracts in their entirety then, technically speaking, few of us are “sufficiently competent” to sign them.

      Few have the time to go through several pages of small legal text and if you did then the online sign-up page would probably time-out before you got to the end 🙂 . Equally that text won’t cover all the cost caveats in detail and some ISPs are very good at hiding those, particularly post contract pricing.

      Perhaps a better point of view, one which is a bit more human and understanding of the consumer-side of things, is to ask.. why does it take a regulator to get providers to do what they really should have all been doing already?

      We wouldn’t need a regulator if commercial businesses played fair in the first place.

    • Avatar New_Londoner

      @MarkJ
      You can of course print the contract terms and read them offline. Tbh anyone that signs a contract without first reading the terms can’t really complain about unfair clauses afterwards – as per my original post, adults are expected to take responsibility for their actions. Equally, if you can’t be bothered to note the contract expiration date, should you really expect the government to step in to do it for you?

    • Avatar un4h731x0rp3r0m

      “Equally, if you can’t be bothered to note the contract expiration date, should you really expect the government to step in to do it for you?”

      Which ISPs tell you the exact expiration date of a contract when you sign up then?

    • Avatar New_Londoner

      You know the contract term, you know the date you signed, the rest is not difficult. If you’re unsure, what is stopping you from confirming the details with your chosen supplier? Why is my mobile or broadband contract different to anything else that I buy?

    • @New_Londoner. Ah the world of cold logic from a company lawyer’s style of perspective. Try asking around your own family members and friends – young to old – how many of them fit that bill of idealistic consumer behaviour. Can you honestly say they all do, even for smaller service spends? Now put yourself in the shoes of a regulator that has responsibility for tackling the reality, it’s not so easy.

      Speaking as the editor of a pro-consumer site, I’m glad there are protections in place and that higher standards are always being sought from the industry. The end result for consumers of Ofcom’s change is still a positive one or do you disagree?

    • Avatar New_Londoner

      @MarkJ
      More a perspective from a supporter of free markets and of minimising unnecessary government intervention. I also have a general concern about the increasing lack of responsibility that people take for their own actions and lives, the ever encroaching infantilism of the UK population.

      I’d far rather see the government concentrate its efforts on the things that really matter, making it clear that it expects its citizens to take responsibility for their own lives except where they are incapable of doing so. Otherwise we risk the government focusing on small, largely symbolic, populist actions like this, rather than dealing with the real matters of State.

    • @New_Londoner. Make sure to tell your family members and friends about their “infantilism” for not reading T&C’s fully or being able to remember the details afterwards etc., see how that goes 🙂 . But you didn’t answer my question, do you see Ofcom’s actual change as being a positive one for consumers or not?

      NOTE: I’m certain Ofcom have ample resources to make such tweaks, without disrupting their usual work elsewhere.

    • Avatar New_Londoner

      @MarkJ
      On the specifics of the proposed Ofcom changes, these are competitive markets, why is regulation encroaching still further? I’d rather see Ofcom gradually withdrawing, letting the market deal with these issues. If it’s a big problem, one or more suppliers will offer a solution and win share until others respond.

      IMHO ever more government intervention in markets is rarely a good thing. Regulators will be tempted to engage in scope creep so would benefit hugely from having a sunset clause.

    • You still didn’t answer my question though, it only takes a simple Yes or No :).

    • Avatar New_Londoner

      @MarkJ
      No.

      There’s no such thing as free money, this will be passed on in price rises or result in less investment, neither of which are exactly positive for consumers. In addition it reduces self reliance and a sense of personal responsibility, something which I believe is deeply harmful to the U.K. in the long-term.

    • Avatar un4h731x0rp3r0m

      “You know the contract term, you know the date you signed, the rest is not difficult. If you’re unsure, what is stopping you from confirming the details with your chosen supplier? Why is my mobile or broadband contract different to anything else that I buy?”

      Why would i need to confirm it with the supplier? You previously stated you can print the terms off, i simply asked which ISP provide the date, you failed to answer. Printing terms will not tell you when your contract expires. Unless you can provide an ISP which does tell you?

      Furthermore terms an conditions in print are not always useful, if you are elderly or have poor eyesight reading small print is not fun, many elderly will not understand half the terms about broadband and people with poor eyesight will not be able to read them in the first place.

      Further more depending on who you sign up with the contract start date can vary.
      Some providers will have the start date as the moment/day you sign up
      Some providers will have the start date as when the first payment is taken
      and…
      Some providers will have the start date as or when you are/or are due to be connected.

      ^^^ I can give example of all 3.

      Knowing the “exact” date a contract starts and ends is not as easy as you seem to think.

      Furthermore i fail to understand why you would think a ruling like this will result in price rises? I fail to see how placing a date for the consumer in print or on a webpage would cost anymore than having a staff member available to customers for as you put it “confirming the details with your chosen supplier?”. Surely that persons wages costs more than a bit of web code to tell people a date? Or just the same as a person in store to write an actual date with a Biro down for you.

    • Avatar Nic Elliott

      +1 for New_Londoner
      I agree with everything you’ve said. What is always missed is that big companies love regulation, because it crowds out the little guy.
      Regulation encourages consolidation in a market, which leads to corporatism (not the same as capitalism – people often conflate the two).
      The best way of encouraging competition, which in turn is the best outcome for the consumer, is to reduce regulation, not increase it.
      Every regulation is a barrier to entry into a market. The big get bigger and it becomes more and more difficult for challengers.

    • Avatar dean

      Ah yes the good old deflect from answering with multi waffle.

      Regulation and a free market, interesting discussion and a great idea.

      Now all Openreach and similar have got to do to get that is pay back their huge debit as well as all the money they were happy to grab from government in this errr “free” market.

      Maybe when the likes of Openreach figure out how to do things on their own with their own money then we can talk again about this “free market” again, until then if you want to owe government (or really the tax payer) considerable sums of money then you can expect to be regulated. Or as own in favour of enterprise chum put it…
      “There’s no such thing as free money”
      and..
      “government intervention in markets is rarely a good thing.”
      Especially when you borrow money from them and wonder why they now want a word in how you run things.

      Such a shame 😉

    • Avatar New_Londoner

      @Dean
      This debate has nothing to do with Openreach as it doesn’t sell broadband services to consumers.

      Noting that but responding to your other generalisations:

      1. Are you sure Openreach has borrowed money from the UK government? Examples?
      2. Or are you confusing this with the government’s BDUK programme which was designed to get private sector companies to deploy infrastructure in places where they would not otherwise do so through subsidy (as opposed to loans)?

      The latter is covered by state aid rules, doesn’t need additional regulatory control.

      Of course Openreach is covered by regulation in those markets where it is deemed to enjoy significant power, in common with other companies in some other markets. A notable exception being Sky, which has managed to enjoy significant market power in pay TV with remarkably little regulatory oversight – the power and influence of its majority owner no doubt!

      Anyway, none of the above has any real relevance to regulatory matters relating to consumer contracts for broadband, mobile or TV services.

    • Avatar New_Londoner

      @un4h731x0rp3r0m
      My reference to printing terms and conditions was intended to be something you did before signature to ensure that you knew what you were committing to. Whilst small print can be difficult to read, the advantage of a soft copy is that you can of course enlarge it and/or use a screen reader if necessary.

      My advice to anyone who is unclear with the terms of a contract is either to seek advice or to find another supplier with clearer terms. If you sign something that you don’t understand you can hardly complain about it later.

    • Avatar dean

      So in one breath you want less legislation, regulation and government involvement and in the next breath you use legislation to try to back up your argument.

      Sounds to me like you only want regulation as and when it suits you.

      Oh and Openreach they have had loads of NON BDUK money including local authorities paying for cabinets at around £10-20 grand a pop.

      Perhaps you should make up your mind what you do want.

    • Avatar un4h731x0rp3r0m

      “@un4h731x0rp3r0m
      My reference to printing terms and conditions was intended to be something you did before signature to ensure that you knew what you were committing to.”

      You do not know what you are committing to if there is no start or end date given. Which is why i asked and still await an ISP from you which actually tells you this.

      “Whilst small print can be difficult to read, the advantage of a soft copy is that you can of course enlarge it and/or use a screen reader if necessary.”

      Why should a person have to enlarge it? You earlier stated “I also have a general concern about the increasing lack of responsibility that people take for their own actions and lives, the ever encroaching infantilism of the UK population.”

      Are the providers which place these terms in small print not adults that should be taking responsibility for their actions then???

      Why should i take responsibility and enlarge things due to anothers “Infantile” insistence and actions of not putting things down in a sensible sized font?

      It works both ways and you do not seem to understand that if you want people to take responsibility for their own actions that will include the clown making things difficult in the first place (IE the ISP with tiny terms and no dates mentioned).

      “My advice to anyone who is unclear with the terms of a contract is either to seek advice or to find another supplier with clearer terms. If you sign something that you don’t understand you can hardly complain about it later.”

      Or if the terms are unclear in the first place (IE no mention of when the contract starts or ends) or if that is ambiguous as i pointed out about contract dates, and how the start dates vary then perhaps that is why the intervention is needed.

      Of course though if providers acted like mature responsible adults in the first place and took responsibility for what they are selling much like what you expect of people to take responsibility signing these terms, then there would not be an issue in the first place. Clearly though some providers are not capable of that. If they were it would not be in tiny print, open to interpretation and generally unclear to parts of the population. Unfortunately we do not live in a world like that and less regulation would just lead to even more detrimental small print, not less. There is always someone who would sooner make a quick buck than be responsible for what they would sell.

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