Phone, broadband and pay-TV customers must be warned when their current contract is ending, and what they could save by signing up to a new deal, under Ofcom rules coming into force on 15 February.
Around 20 million customers are already out of contract – including 8.8 million broadband customers – and many are paying more than they need to.
Our research shows that, every day, 25,000 broadband customers come to the end of their contract – and this usually leads to an automatic price rise.
You can earn big savings on your monthly bills if you take advantage of discounts available when you sign up to a new deal. But 16% of broadband customers don’t know if they are in contract. This rises to 21% of over-55s.
So, we’re introducing rules to make sure you can see whether you’re on the best deal. Phone, broadband and pay-TV companies will have to warn customers between 10 and 40 days before their contract comes to an end.
These alerts can be sent by text, email or letter, and they must include:
If you’re already out of contract, you must be reminded of this, and your provider must tell you every year about their best deals.
Last year, we found that out-of-contract broadband customers could save an average of around £100 a year by agreeing a new deal with their existing provider. Some could save £150 or more, depending on their provider. And this doesn’t include savings people could make on their TV package.
Around three million out-of-contract broadband customers could actually upgrade to a higher-speed package with their provider and pay less than they do now.
Among mobile customers who buy a handset and airtime bundled together in a single contract, 1.4 million could save money by switching to a cheaper ‘SIM-only’ package at the end of their existing deal. Last year, we found that they could save an average of £75 a year, but some could save as much as £150.
Many people will pay fairer prices following commitments Ofcom has secured from mobile operators and broadband providers to cut prices for out-of-contract customers. Most of these are now in effect, with some broadband commitments coming in shortly.
Millions of people are out of contract right now and paying more than they need to. These new rules make it easier to grab a better deal.
But you don’t need to wait to hear from your provider. Just a few minutes of your time could save you hundreds of pounds today.Lindsey Fussell, Ofcom’s Consumer Group Director
We have launched a new campaign encouraging people to check whether they are in or out of contract, and helping them secure a better deal.
Our new dedicated advice hub walks you through the quick and easy journey of making sure you’re not paying over the odds – helping to earn big savings in just three simple steps:
Around 30% of mobile and broadband customers are not confident in navigating the market and haven’t switched in at least two years. That rises to around 40% among over-55s. So, to help people get the right deal for them, we’ve made it simpler than ever to shop around and switch.
Last year, we put in place extra protections for broadband customers – meaning you can walk away from your contract without being penalised if speeds drop below the level you were promised. We also introduced major reforms allowing mobile customers to switch operator by simply sending a free text message.
This is part of our ongoing Fairness for Customers programme, which is helping to make sure you are treated fairly by your provider at all times.