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By: MarkJ - 17 June, 2010 (12:47 PM)
ofcomOfcom UK has announced that the charges consumers often face when attempting to leave their landline phone contracts early - 'early termination charges' - will be slashed by up to 85%! Better yet, this will also apply to landline customers who receive broadband in the same package.

The regulator claims to have spent the past 18 months working with BT , TalkTalk and Virgin Media to ensure that the charges they levy when customers leave early also reflect the costs that the providers save by no longer providing the service.

Ofcoms view of the Unfair Terms in Consumer Contract Regulations 1999 Act is that consumers who end contracts early should never have to pay more than the payments left under the contract – in fact they should often pay less, as per above.

Early last year the regulator opened a monitoring and enforcement programme to keep tabs on the problem. Following "constructive discussions" all three of BT , TalkTalk and Virgin Media have agreed to significantly reduce those charges for landline (or landline plus broadband) services.

Ofcom’s Partner for Strategy and Market Developments, Peter Phillips, said:

"We very much welcome the reductions made by BT, TalkTalk and Virgin Media which mean that consumers will face much lower charges if they wish to end their contracts early."

TalkTalk already introduced its new charges on 1st June 2010 (except for its ex-Tiscali brand customers, where charges will change on 1st November 2010). Virgin Media and BT are set to follow with their own new charges during October 2010.

Prior to 1st June TalkTalk’s practice was to cap total early termination charges at £75. Today customers would not pay more than £3-£8, depending on package (charges are monthly for remainder of the contract). The maximum at BT will soon be dropped to £5, while Virgin Media sits at no more than £9.

early contract cancel charges uk

However Ofcom warns that all landline providers are expected to apply similar principals, reducing their early termination charges in kind. Those that fail to do this could face formal enforcement action.
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