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End of Contract Letters to Start for UK Mobile and Broadband ISPs

Friday, February 14th, 2020 (12:01 am) - Score 7,525

Starting tomorrow all fixed broadband, mobile, home phone and pay TV providers will be required to implement Ofcom’s end-of-contract notification system (sent by text, email or letter), which is designed to help tackle the so-called “loyalty penalty” by keeping customers informed about the best deals and encouraging switching.

At present it’s a fairly normal practice for the largest providers in any aggressively competitive market to entice new customers by offering big price discounts on your first minimum contract term (lasting up to 12-24 months), although the price you pay often jumps significantly once outside of that period (post-contract).

NOTE: Ofcom says people who bundle their phone and broadband together pay, on average, around 20% more when they’re out of contract (rising to 26% among those who bundle pay-TV).

Unfortunately not all ISPs are clear enough about how much you’ll pay after your initial minimum term has ended, while some consumers (16%) aren’t even aware of when their broadband contract term is due to end (rising to 21% of over-55) or how much they’ll be paying once it does.

Likewise others may be fearful of switching complications, such as service downtime or the hassle of having to figure out who they should switch to. Around 30% of mobile and broadband customers are not confident in navigating the market and haven’t switched in at least two years, which rises to around 40% among over-55s.

All of this has given rise to the so-called “loyalty penalty“, which is a general reference to how subscribers who remain with their provider and don’t haggle for a better price – only 10% of consumers ever do this (see our Retentions Tips article) – will often end up paying more than new customers. In response Ofcom has spent the last 2 years encouraging greater fairness and pushing a new end-of contract notification system.

End of Contract Notifications

From tomorrow providers will be required to issue End of Contract Notifications to existing subscribers (usually between 10-40 days before the end of your contract). This letter, text or email will include the end date of your current minimum term, details on the existing package and what you’ll be paying if you stay etc.

Notification Details

* The contract end date;

* The price paid before this date;

* Any changes to the service and price paid at the end of this period;

* Information about any notice period required to terminate the contract; and

* The best deals offered by their provider, including telling loyal customers what prices are available to new customers. Ofcom requires that such deals should be available for at least 30 days from the date of notification in order to give consumers a chance to compare and consider.

Providers will also be required to send a notification to all existing customers whose initial contract term has ended (must be done “at least” annually). On a mobile plan this must also include at least one SIM-only deal for customers on bundled handset and airtime contracts.

Business customers will also receive the notifications and best tariff information annually in a form suitable for them. Ofcom said providers will all have to “tell customers about their best available deal, both when their deals are coming to an end, and every year after that if they don’t change their deal.”

NOTE: Consumers on shorter 30 day (monthly) rolling contracts will only be sent a single annual notification (provided they’ve been with the same provider for over a year).

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

“Millions of people are out of contract right now and paying more than they need to. These new rules make it easier to grab a better deal.

But you don’t need to wait to hear from your provider. Just a few minutes of your time could save you hundreds of pounds today.”

Ofcom’s approach is clearly designed to encourage more switching and the providers will no doubt seek to control that outflow, which may hopefully result in such companies putting extra effort into offering better deals to existing subscribers. On the other hand if we do see better offers for existing customers then this may be balanced by less attractive promotions for new customers. Time will tell.

At the same time as all this the regulator has also been busy encouraging providers to put more effort into protecting vulnerable consumers. As part of that they last year introduced a new Fairness for Customers commitment and proposals for a Fairness Framework, which since then has seen ISPs pledge to give customers a “fair deal” and adopt a “fair approach to pricing” (i.e. prices must be both clear and easy to understand).

Under this approach Ofcom managed to pry a range of commitments from the market’s largest broadband providers (see below), which will help to protect consumers and more vulnerable groups (i.e. the ones most likely to suffer as they rarely ever shop around and switch). The regulator is also still exploring “the case for a new, special tariff to protect low-income households” (this would require new legislation).

Fairness Commitments by the Biggest UK ISPs

* BT, Sky Broadband and TalkTalk will allow their out-of-contract customers to get the same deals as new customers, when they take out a new contract (Sky has already implemented this commitment. BT will offer new customer prices to existing customers, albeit only for a limited time period when sending end-of-contract and best tariff notifications).

* The difference that any of Sky’s newly contracted customers will pay when their contract expires is no more than £5 per month. From February 2020, BT will cap the difference that existing in-contract customers pay when their contracts expire (they’ve yet to confirm the amount of this cap).

* BT customers without access to superfast broadband will no longer pay more than entry-level superfast customers (due to be introduced from mid-2020). And BT will provide a one-off automatic price reduction for vulnerable customers who are currently out of contract on more expensive deals.

* TalkTalk and Virgin Media will both carry out annual price reviews for their vulnerable customers to ensure they are on the best deal for their needs, providing automatic discounts where appropriate if customers do not respond.

* BT, EE, Plusnet and TalkTalk have all pledged to protect out-of-contract customers from above-inflation price rises.

Some of the above changes will be introduced alongside tomorrow’s new notification system and others will follow soon after. Despite all this we still see ISPs that fail to do basic things, such as making their post-contract prices clear (i.e. hidden away in the small print or they don’t tell you about it until AFTER the order process has started), and it remains to be seen if this will continue.

The new end-of-contract notifications also have a couple of caveats. Firstly, they can tell you what deals are available to new customers but the catch is that they don’t have to offer those to you (even though we suspect some will). Secondly, they don’t have to tell you about incentives or gifts, which means that new customers might be offered a £100 shopping voucher but the provider doesn’t have to mention that in its letter.

Example of a Text Message Notification

end_of_contract_text_notice

UPDATE 8:57am

We’ve had a comment in from the first ISP.

TalkTalk Chief Executive, Tristia Harrison, said:

“TalkTalk is committed to making the broadband industry a fairer place and continues to champion the move to full fibre enabling customers to benefit from faster, more reliable services.

We already notify our customers when their contract is coming to an end, so welcome Ofcom’s new requirement coming into force that makes it mandatory for all providers to do the same. We led the way on fairness by being the first to guarantee no mid-contract broadband price rises across all its plans in 2016. And we haven’t stopped there, from making it easier for new and existing customers to find the best deal through to capping out-of-contract prices, we’ll continue to strive for a telecoms industry that always puts the customer first.”

TalkTalk’s Fairness Commitments

TalkTalk will continue to never increase broadband prices mid-contract.

Will continue to notify customers when they come to the end of the contract so they can find the best new deal – and will now offer them better value or the same package available to new customers.

Will continue to provide customers with unlimited broadband so customers never find their data restricted at peak times.

Will continue its Great Connection Guarantee, that lets customers trial their fibre broadband for 30 days – if they’re not happy, they can leave penalty free.

>From March, out of contract Fibre and broadband customers won’t pay more than £30. [Changed below as TalkTalk’s PR firm got this wrong]

Faster Fibre and Broadband customers who don’t get around to switching onto a new deal won’t pay more than £30 a month from March. With standard out-of-contract pricing to be reviewed in-line with inflation from May 2021.

>From March, out of contract fibre customers won’t pay more than £5 more than their previous contract price. [Removed as TalkTalk’s PR firm got this wrong]

Leave a Comment
21 Responses
  1. Avatar Bures

    Although I have been with Plusnet for over ten years, they make it extremely difficult on their Account page to find the end of contract date.
    You have to find out when you took out the contact and then add the relevant months on.
    In all those years, never once was informed my contract was about to end, in some cases due to a hefty price rise it had already ended and out of contract
    Hopefully this new procedure will end all of that

    • Avatar Paul

      Only been with Plusnet for a year so can’t say about previous years and not sure where you looked but if you login to your Plusnet account on a mobile device, the first page that loads has under “My Bills” and “My Products”, a section called “My contact” with a progress bar, your start date at one end and your end date at the other. Don’t see how it can be more simple to find.

    • Avatar Guy

      Yeap I am delighted that these new regulations have been implemented as these providers like virgin for example been with dem for around 10 years or more and I had a deal that started at £55 then to £63 and £93 for tv and broadband ,which had apparently been done over the phone which I have no recollection of.they were no help as they couldn’t work out how this had happened so basically these fraud company got away with around £40 due to the increase after the contract had ended. When you get these over the phone offer they seem to have this problem of not mentioning the increase of the deal in the pass offer that I have had with this company. Not even a sorry. I decided after all that drama to just have the broadband only as I wasnt getting value for money and when trying to come up with a deal that would match what I was able to afford customer service representatives were trying to push these higher prices. Which never made any sense as I had already stated the limitations of the amount I could afford. So once this contract is over I will be finding another provider Virgin as a company has gone down hill.they don’t value there Customers. Once upon a time they did they have become the worst. IF I’m being honest I would send a dog to take a contact out with this entity you will end up being ripped of with know form of apology or compromise, just pay up or leave is there new slogan for a lot of people when it come to Virgin

    • Avatar Stephen Wakeman

      When you say you find out by looking at the contract start date and then having to add on the months… so what?

      If you’re of sound enough mind and have capacity to enter into a financial contract with a provider it is surely not unreasonable to expect a basic level of understanding when it comes to: “In March 2018 your 24 month contract started” from which you can establish when your contract ends in… a matter of seconds?

      Don’t get me wrong, I support the concept of these companies having to be more upfront and proactive about it, but you have to draw the line somewhere. I was with PlusNet for 3.5 years, and two of those years were out of contract. They didn’t hike the price. By the end I was paying £1 per month more than when I’d signed up. I could see when I’d signed up from my account page and the contract term period so I knew I was out of contract.

      That is not hard to understand or deduce. The way you have described it makes it seem like they obfuscate the data. What do you want, a massive flashing red and yellow popup saying “your contract is ending soon!”, When you log in?

      Crikey.

  2. Avatar Gary

    About time but I find the comment about end of contract notice being advised somewhere between 40 and 10 days ahead somewhat odd.

    BTinternet for example require 30days notice of cancellation, so even at the upper limit of 40 days a customer would have only 10 days to research and choose a new provider, take that to the lower figure and with 10 days notice you’re already forced into an extra 20 days with them at out of contract pricing.

    If switching via the ‘normal process’ they say this reduces to 14 days.

    Despite the fact that it’s really our own responsibility to look after our own finances and payments, I think this part of the code of practice could have been better.

    If your car isurance contract is comming to an end It ends theres no requirement for notice that may extend beyond the contract end date.

  3. Avatar Jazzy

    EE are very good at this already, Sky not so much but they do tell you the date in a letter when you go into a new contract

    When I am out for a few bevvies with friends, I am shocked at how many people don’t re-negotiate the Sky or Virgin TV package every year. One friend had let it run 10 years without haggling. He’s paying £20 a month more (£240 a year) for the exact same package I am on and only got a better deal on his broadband when he got FTTC about 4 years ago, again, not haggling since. He phoned up and is now paying £1.50 a month less than me. That was a fair chunk over overpaid money, just ripped out his pocket for years

  4. Avatar Philip Cheeseman

    I wonder if this will mean the end really generous switching deals? I’ve switch ISP since getting FTTC evertime my contract comes up. Between cashback (quidco/topcashback), prepaid debit cards and reduced cost for X months I’ve not paid more than about £20 for FTTC with phone line for a long time. I’m really hoping this continues as I only get 20Mbps sync so I hate paying the same as everyone on decent 40Mbps services I can’t get.

  5. Avatar SimonM

    Is there a way to “opt out” of these notications, such as the method the provider uses, or are ofcom allowing providers the ability to ignore marketing preferences/permissions set under GDPR and previous contact preference settings?

    For example, I may not want to receive such information by Letter or Text, but ok to by email, or may want to by Letter but not by being “spammed” in my email or text messages.

  6. Avatar Peter

    What I want, what I really, really want is a button on my account that is 1 contract month before the end of the 12/24 months so that I can terminate my contract on the exact date it ends that period.

    I’m sick and tired of companies getting an extra month out of me as their customer reps tell me that I can’t terminate my contract until 12 months are up meaning I end up paying for 13 months.

    We are in a digit age, make it a easy digital way to terminate at the contract end!!!

    Grrr, thats always annoyed me.

    • Avatar Peters Pal

      Then plan ahead. Whilst I agree with this being brought in to place. Customers like yourself Peter going off your comment are the only cause of people going out of contract. Plenty of businesses send renewal offers well before the end date.

      If you were to take note of your dates etc you’d not be complaining.

      These companies can’t just wipe everybody’s arse for them.

  7. Avatar Ally C

    I’m with Talk talk and I searched high and low on the site after logging in to see when my contract was up… nothing. I used Bank statements and archived email to discover I’m out of contract…last month.
    To be fair, only had a few outages over the year, but now searching for another supplier as I DO NOT qualify for a discount as I’m not a new customer… loyalty? It’s not in their dictionary…

    • Avatar biscuit

      Loyalty for services doesn’t exist in this day and age whether it’s ISP, car insurance, home insurance or even your local grocery store – i’m not sure if they ever existed!

      I do like TalkTalk’s prices however using their call centre is such a horrible experience – Here’s my little rant from last week.. I phoned as a potential new customer wanting to know if ultrafast is possible from TalkTalk (its available from Sky and soon BT) and the conversation was so confusing and awkward – unable to convey such a simple thing due to the language barrier, and my accent probably didn’t help much.

      In the end they were trying to get me to answer security questions to get into my 5 year old TalkTalk account (of course I don’t know my card details used 5 years ago) in order to see what speed I can receive – I naturally failed the security questions due to above, and they couldn’t help me at all. Goodbye potential customer.

  8. Avatar George Brown

    Your criticism that large isp’s don’t let customers know when they are out of contract is unfair. If you read customer reviews of Hypeoptic, you will find many criticisms of how they are treated when out of contract.

  9. Avatar Michael V

    I’d rather an email than something thru the post!

  10. Avatar Stephen Wakeman

    Why are there comments saying that this is going to spell the end of enticing switching deals and everybody paying the same price?

    If you think this then you fundamentally misunderstand what this is for. This is to make it less likely that customers will be price gouged by not being aware that they are no longer contractually bound to their provider.

    It does limit the market, it does stop providers from doing introductory offers. It changes nothing about there being competition and rival providers wanting to poach customers – where price and deals play a key part in the enticement.

    Some people are conflating this with some kind of market homogenisation and it is nothing like that, nor is there anything to suggest it will lead to that. Do remember that ignorance of contract end date is but one factor that results in customers not switching or bartering. There’s also laziness, stupidity and blind loyalty and there is nothing anyone ignoring the letter.

  11. Avatar Jerry Catterall

    Out of contract with Sky 20th February 2020. No notification prior to 100 per cent increase in my subscription which has been taken in advance from my bank account, New regulations from Offcom same old Sky

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