As per new rules of Ofcom – UK’s communication watchdog Broadband, pay-TV, mobile phone and landline customers must be informed about their contract termination and about providers’ best alternative deals. It has been observed that more than 20 million users are stuck with their current subscription beyond their lock-in without being aware of it. About 14% of customers are unaware of their current contracts.
Users who opt to stay with their current package need to be reminded that they can still switch to another plan on yearly basis. Service providers are given nine months to update their system and should start sending out notification from February, 15 onwards. Service providers will also need to text, email or send a letter to their consumers within 10 to 40 days before their contracts terminates. It should state:
- The date on which contract can be terminated without penalty
- The price consumers have been paying
- The changes to the price or service that automatically comes into effect after the date
- The time frame of notice in order to cancel the deal
- The best alternative subscriptions on offer, including the prices charged to new customers
This will put power in the hands of millions of consumers who are paying more than necessary when they’re no longer tied to a contract. Reports suggest customers can cut the cost of a bundle of the services by about 20% if they sign a new deal rather than a contract beyond its minimum period.
Hope Ofcom would bring an end to this scam by concrete actions since it is unfair to charge more to loyal customers. Due to this action small internet providers focusing on business customers might struggle with the cost and complexity of adapting to their systems to meet the rules.It is expected that Ofcom would address the concern on lack of clarity around small business customers.