Ofcom forces telecoms firms to tell customers about better deals

Mark Johnson's picture

The UK media and communications regulator Ofcom has issued new rules forcing broadband, phone and pay TV firms to tell customers about their best deals.

Under the new rules companies will have to tell customers every year about the best deals they offer so that people can get the best package for their needs.

The rules come into effect on 1 July, and could benefit more than 20 million people across the nation, who have outrun their initial contract period.

20 million customers could be affected

“Our research shows that more than 20 million customers have passed their initial contract period”, the regulator said in a statement issued through the London stock exchange. 

“Many of these could be paying more than they need to.”

Ofcom said it wants customers to be able to take advantage of choice in broadband, phone and TV, and get the best deals for their needs. 

This could be by switching provider or agreeing a new deal with their existing one.

“To help people do this, we are requiring broadband, TV, mobile and home phone companies to send their customers the information they need about their contract, when they need it, so they can choose the best package for them”, Ofcom said. 

The latest rules form part of Ofcom's Fairness for Customers programme.

The watchdog noted that people who bundle their landline and broadband services together pay, on average, around 20 per cent more when they are 'out of contract'. 

This rises to 26 per cent among customers who bundle their pay TV with these two services.

Around one in seven customers (14 per cent) don't know whether they are still tied to their original deal; and around one in eight (12 per cent) believe they are 'in contract', but don't know when this period ends.

New alerts for customers

Ofcom is also forcing telecoms and pay TV companies to warn customers between 10 and 40 days before their contract comes to an end. 

These alerts will be sent by text, email or letter, Ofcom said, and will include:

  • 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.

People who choose to stay with their provider without signing up to a new contract will be sent a reminder every year about their firm's best deals.

"We're making sure customers are treated fairly, by making companies give them the information they need, when they need it”, said Lindsey Fussell, Ofcom's Consumer Group Director.

"This will put power in the hands of millions of people who're paying more than necessary when they're no longer tied to a contract."

The changes will involve providers sending personalised and tailored information to millions of individual customers. 

To make sure they get this right, companies will have nine months to make the necessary changes to their systems and processes. 

Customers will start receiving the notifications from 15 February next year.