Ombudsman Services hails Ofcom contract alerts plan

by Ombudsman Services | Jul 31, 2018

Ombudsman Services: Communications has welcomed plans to ensure consumers are notified when their broadband, landline, TV or mobile deal is coming to an end.

Ofcom has today put forward the proposals as part of a drive to help consumers shop around and get the best deal.

The regulator estimates that more than 20 million UK consumers are outside their minimum contract period, while more than 10 million people are on deals that contain an automatic price increase at the end. As a result, it is claimed, millions of customers could be paying more than they need to.

Ofcom is proposing that providers must notify consumers when their contract is coming to an end. The notification would inform the consumer of any changes to their price or services and let them know their options, including that they could save money.

Providers would also be required to send a one-off ‘out-of-contract’ notification to all existing customers whose initial contract has ended, and who weren’t given this information at the time.

Ombudsman Services, which provides independent dispute resolution for consumers and businesses in the communications sector, described the Ofcom proposals as “a victory for common sense, consumers and businesses.”

Jonathan Lenton, communications ombudsman at Ombudsman Services, said: “Many consumers find it hard to keep track of when their various communications contracts are coming to an end. Often, the fact that the contract end-date isn’t clear is in itself an obstacle to switching.

“The problem with expiration of contracts in communications is particularly difficult because services are increasingly provided under a bundle, with different expiration dates for different components.

“Ofcom’s proposal is for an arrangement similar to what happens in car insurance where, every year, customers receive a renewal notice that prompts them to shop around. Such a setup in communications would help to encourage switching.

“Many providers offer a discount for the life of the contract, which is removed at the expiration – hence the price rise. Consumers often tell us that they don’t remember what they were told when they signed up to a contract – hardly surprising when many contracts are for 24 months – and so the increase comes as a shock.

“More clarity over contract end dates would be beneficial as it would help consumers understand when they can shop around.”

He added: “Today’s proposals will be welcomed not only by consumers, but also by forward-thinking businesses that recognise the value of transparency and a level playing field. Enabling consumers to make informed decisions is in the interests of the communications industry as a whole.”

Ofcom is consulting on today’s proposals until 9 October 2018. Ombudsman Services will issue a formal consultation response in due course.

Find out more about Ombudsman Services: Communications.

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