New Ofcom rules aimed at preventing telcos abusing consumer procrastination
New alerts to remind us when we approaching the end of the minimum contract period seemed to be directed at telcos who take advantage of procrastinating customers.
Changing contracts is a cumbersome and frustrating process, with sceptics perhaps suggesting the telcos do this on purpose, but proposed rules from Ofcom indicate the regulator has had enough of the consumer being abused. The idea is one which some might be surprised doesn’t exist already; landline, broadband, TV and mobile customers must be told when they are approaching the end of their minimum contract period.
“There is so much choice out there for people, but we’re concerned many are paying more than they need to – particularly those who are out of contract,” said Lindsey Fussell, Ofcom’s Consumer Group Director.
“So, we’re looking at ways to make it as easy as possible for people to shop around for the best deal. Consumers have told us they want to be alerted that their contract’s coming to an end and get advice on what their options are, and we’re proposing that providers must do exactly that.”
Ofcom believes there are more than 20 million customers who are currently outside their minimum contract period, and more than 10 million are on deals with an automatic price increase at the end. Of course there will be those who are happy with the service, so would opt to continue, but there are of course those who simply forget. Some of these customers might be automatically put onto higher tariffs without realising. A few people might view this as taking advantage of the customer, especially as Ofcom notes some service providers do not explain what will happen after the contract ends.
Under the new proposals, service providers would be required to notify customers between 40 and 70 days before the contract ends, while also detailing any changes to their price or services. Providers would also be required to send a one-off ‘out-of-contract’ notification to all existing customers whose initial contract has ended, but who weren’t given this information at the time.
Although the proposals are likely to be challenged by the service providers, it is nice to see Ofcom making progress in wrestling the strangle hold service providers have over some customers. Generally when these changes are proposed the service providers through lawyers at the situation, burying Ofcom under mountains of legal documents and red-tape. It is one of the reasons positive changes for the consumer seemingly take years to materialise; why would service providers want the status quo to change when it makes them so much money?
