Fairer prices for out-of-contract broadband customers
New Ofcom measures are set to help customers whose broadband contracts have ended.
Ofcom has set out a range of measures to ensure people whose broadband contracts have ended pay fairer charges.
The moves also aim to make sure providers offer better protection to vulnerable customers.
From February 2020, broadband customers must be told when their contract is coming to an end, and shown the best deals available. If people choose to stay with their current provider without signing up to a new contract, they will be given details of the best deals.
Paying over the odds
Some out-out-contract broadband customers are paying high prices once their introductory broadband offer ends. But Ofcom’s review found they could typically pay £8-£9 less per month if they signed a new deal with their current provider. It says around 40% of broadband customers – 8.8 million people – are out of contract.
The regulator is particularly concerned about people in vulnerable circumstances who might be paying more because they’re not confident to negotiate with their provider or shop around.
Andrew Milburn, Director at comparethemarket.com, said: “It’s simply not acceptable that 8.8 million customers are out of contract and likely paying significantly over the odds for their broadband.
“The new rules, that will ensure that customers are told when their contract is coming to an end,cannot come soon enough. Currently the onus is still on the customer to notice that they have fallen out of contract. Getting a fair deal should be the minimum obligation, and helping customers navigate this often complex and opaque market should be a priority for the industry.”
Lindsey Fussell, Ofcom’s Consumer Group Director, said: “Broadband customers who are out of contract can make big savings – around £100 a year on average – by picking up the phone to their current provider and signing up to a better deal.
“And in future, everyone will be told about the best tariff on offer. Thanks to the commitments we’ve secured from major broadband firms, many customers – including the most vulnerable – will pay less.”
Changes by providers
Broadband providers have already made commitments to cut prices for out-of-contract customers as a result of the review, Ofcom says. Most of these will come into effect by March next year.
- BT, Sky and TalkTalk will allow out-of-contract customers to get the same deals as new customers, when they take out a new contract.
- Sky’s newly contracted customers will pay a difference of no more than £5 per month when their contract expires. BT will cap the difference existing in-contract customers pay when their contracts expire. This comes into force from February. The amount of the cap is to be confirmed.
- BT customers without access to superfast broadband will no longer pay more than entry-level superfast customers.
- BT will give an automatic, one-off price reduction for vulnerable customers who are currently out of contract on more expensive deals.
- TalkTalk and Virgin Media will carry out annual price reviews with vulnerable customers to make sure they’re on the best deal for them. They will provide automatic discounts where appropriate if customers don’t respond.
- BT, EE, Plusnet and TalkTalk will protect out-of-contract customers from above-inflation price rises.