The move is intended to reduce the number of consumers paying out-of-contract rates for their telecoms services
The UK’s telecoms regulator, Ofcom, has set out new rules, which will force telecoms service providers to inform their customers when they reach the end of their contract and to inform them of better deals that are available.
The new legislation will require UK internet service providers (ISPs), cable TV providers and mobile network operators to inform their customers of the best deal currently available to them when they reach the end of their contract – even if that deal is with a rival competitor.
“We’re making sure customers are treated fairly, by making companies give them the information they need, when they need it. 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,” said Lindsey Fussell, Ofcom’s consumer group director.
Research commissioned by Ofcom suggests that as many as 14 per cent of British consumers are unsure whether they are still being charged the original contracted rate for their mobile or broadband services.
The UK regulator said that it believes that up to 20 million people in the UK are already outside of their initial contracted period with their current service provider.
The move has been greeted enthusiastically by analysts and consumer groups alike.
“Ofcom’s plan is a welcome change. Too many broadband subscribers are potentially paying over the odds because they don’t regularly review their package and have simply accepted annual price increases. Many broadband deals are sold with discounts for the initial contract term, and although these are often good value for the first 12 or 18 months the cost after the discount ends can be substantially higher," said Broadband Genie‘s Matt Powell.
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