Additional charges

13 January 2018

If you’re thinking of taking out a new mobile phone contract or perhaps you want to change your home phone, broadband or pay TV supplier, then there are a number of things you should look out for before making that decision.  Often the price that’s advertised is not necessarily the only charge that you will pay.

Ofcom has set out guidance for communications providers on how we think the law applies to the extra charges that you may have to pay on top of headline prices.

These charges are generally for: paying by cash or cheque (rather than by direct debit), receiving an itemised or paper bill, paying late (or not at all) or leaving your provider before your contract has ended.

This guide sets out the things you should consider before signing a new contract. Not all providers charge extra and charges may vary. So it’s worth shopping around.

Payment methods

There should be no extra charge for paying by debit card, credit card or PayPal from 13 January 2018 for residential and business customers under contracts taken out on or after 18 July 2017. This covers most card payments except for corporate cards (i.e. cards issued to employees for business expenditures such as office equipment and supplies).

You should check whether there is an extra charge for paying by cash, cheque or online/telephone banking. Providers should tell you what these are, but you should always check their terms and conditions and marketing material. Ask if you are unsure.

Residential customers who took out a contract on or after 6 April 2013 and customers using corporate cards who took out a contract on or after 18 July 2017 may also be protected by rules which say that charges for using particular methods of payment should do no more than cover the costs the company incurs in processing the payment.

Leaving your communications provider

  • Check if there are any charges if you decide to leave your provider earlier than the agreed term. You should confirm these with your provider when you enter the contract. The charge should never be more than the remaining payments left in the contract;
  • There may also be a charge for cancelling your broadband service even if you are no longer under contract. It shouldn’t cost more than the actual costs that the provider has to pay to any wholesaler. You should check when you sign up; and
  • Also check how much notice you will need to give your provider before you cancel your service. This should never be longer than 30 days.

Contract terms

When you sign a contract it will be for a certain length of time, usually 12 or 24 months, and all providers should tell you at the beginning of the contract how long it will last for. Sometimes when you change your service in some way or move house, providers will extend or renew the contract period.

If you are a residential and small business customer of fixed voice and/or fixed broadband services, you should not be automatically transferred onto another contract without your express consent as Ofcom banned this practice from 31 December 2012.

Late or failed payment charges

Sometimes you might miss a payment or your direct debit may fail and you get charged by your supplier. These charges should only be as much as it costs for the provider to chase and collect late payments.

Billing charges

Some providers will charge if you wish to receive a paper rather than an online bill or if you wish to have a fully itemised bill. Your provider should set out clearly what these charges are, but you should check with them if they don’t.

Ofcom’s guidance sets out what it expects from communications providers. If you believe that your communications provider isn’t following the guidance, please visit our website or call the consumer contact team: 0300 123 3333.