TalkTalk has blasted BT for its use of rolling contracts for broadband customers that it claims are leaving cash-strapped consumers unfairly locked out of competitive broadband deals.

In a statement issued by TalkTalk, the company drew attention to the fact that it is now just over a year since BT introduced its rolling contract scheme, whereby the onus is placed on customers to tell BT that they want to leave the supplier once their initial contract term has expired. In the event that the customer does not notify BT they are automatically signed up for a new full term contract, which could be up to 18 months long.

TalkTalk claims that this is unfair to consumers because it prevents them from seeking out a deal from another supplier and in so doing potentially saving money. Furthermore, the provider highlighted the fact that should a BT customer opt to leave the company once their new contract has commenced they are liable to pay £180.

BT’s policy is far from standard in the UK broadband sector, where common practice is that at the end of the initially agreed contract term, the customer is a free agent. They are then entitled to terminate their agreement with the company by request with immediate effect and incur no penalty charge.

Andrew Heaney of TalkTalk was scathing in his condemnation of BT, which he claims has deliberately introduced the policy to take advantage of consumers’ well-documented inertia over switching provider.

Mr Heaney said: “We believe that rolling contracts are a sharp practice at any time, but particularly so in the current credit crunch and with given the riches available in the market. We would like to see these unfair rolling contracts stamped out and have already called upon Ofcom to take a firm line in this area.”

Heaney continued: “BT cynically places the onus on its customers to cancel their contracts – simply because it knows that many of them will simply forget.”

BT has countered TalkTalk’s criticism in a statement to ISPreview. A spokesperson for the company said that rolling contracts were in fact a “clear and positive choice” for consumers, and that it made its terms clear to customers in communications when the new contract policy was introduced in February 2008.

The spokesperson also noted that BT customers are notified of the forthcoming automatic renewal of their contract 30 days before the official end date of their initial contract. At this time, he added, they are entitled to leave without incurring a financial penalty.