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Requiring broadband providers to send out warning notices to customers notifying them that their contracts are coming to an end could help save British consumers more than £1 billion a year.

This is according to uSwitch research, which noted that many customers are unaware that providers typically increase their fees at the end of contracts, with the average price rise being 62 per cent. 

Therefore, giving people notice of this would prompt three-quarters of broadband users (74 per cent) to take action by switching to a cheaper deal or provider.

However, our study also found that the timing of these warnings is critical, as if they are sent too early, consumers could find themselves paying for cancellation fees by switching before the end of their contracts.

Telecoms regulator Ofcom is currently considering proposals for a 40 to 70-day notification period before the end of a contract in which broadband providers would be required to alert their customers. However, many people feel this is too early and would lead to many of the potential savings being lost.

Our head of regulation Richard Neudegg commented: "Broadband contracts are one of many things we have to juggle when running a home and so can easily get buried in the noise of everyday life. That’s why the timing of notices warning customers that their contracts are due to end is so key, as it's not reasonable for consumers to have to commit to memory the exact date every contract ends."

Currently, nearly nine out of ten consumers (87 per cent) say they are bothered by the lack of notifications that could save them money on their broadband bill - especially as such warnings are standard practice for other household services, such as energy and insurance.

However, more than three-quarters of people (77 per cent) say that sending out notices three weeks or more before the end of a contract would be too early. Our research calculated that this could lead to as much as £845 million of potential savings going unclaimed if these early notifications put customers off looking for a better deal at the end of their term.

Instead, a notice period of between 14 and 21 days prior to the termination date would ensure customers can take action at the right moment.

Richard said: "Allowing companies to notify customers a whopping 70 days before their packages are due to end – as Ofcom is suggesting – risks letting providers get off scot-free as the information is not yet relevant and exit penalties still apply.

"The regulator has a real chance to address these issues that have kept customers in the dark for far too long – but unless these notifications are optimally designed to encourage consumers to engage with the market, they will effectively maintain the status quo."

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