For many broadband customers, the end of a contract usually means a big jump in the price they pay for their services. Those who don't take the time to switch when this happens end up paying well over the odds for their internet and phone - and many people may not even realise when this happens because they aren't aware of when their contract ends.
But under new rules put forward last week by Ofcom, this is all set to change. The telecoms regulator has set out a series of regulations that will ensure broadband, phone and pay TV customers are told when their contract is coming to an end, and they are fully informed about the best deals their provider has to offer.
This could be great news for millions of consumers around the UK who are paying too much for their broadband - and who may not even be aware their contract has ended and they are free to switch broadband provider without penalty. So what do the new rules say, and what could it mean for you?
At the heart of the new rules are notifications that all consumer broadband, phone and TV customers will receive in the weeks before the end of their contract. These alerts can be sent either by letter, email or text message and must arrive between ten and 40 days prior to the contract end.
They will include the following information:
This should give users all the information they need to make an informed choice, allowing them to decide whether to continue with their current provider without a contract, to negotiate a better deal, or switch to another supplier.
Those who do opt to stay with their provider without a new minimum contract will still get reminders every year about their firm's best deals.
Lindsey Fussell, Ofcom’s Consumer Group Director, said: "We’re making sure customers are treated fairly, by making companies give them the information they need, when they need it.
"This will put power in the hands of millions of people who’re paying more than necessary when they’re no longer tied to a contract."
Ofcom estimated that up to 20 million customers in the UK have passed the end of their contract without switching or signing up to a new deal, and many of these people could therefore be paying more than necessary for their TV, phone and broadband services.
In fact, the regulator said that consumers who have a bundle deal that includes landline and broadband services together pay an average of 20% more when they are out of contract compared with those still in their initial term. For those who add pay TV services to their package, this rises to 26%.
Previous research by uSwitch has estimated sending end of contract warnings could save consumers in the UK a total of £1 billion a year by encouraging them to seek out the cheapest deals. Our figures suggested almost three-quarters of people (74%) would act on these notifications.
The biggest benefits would undoubtedly go to those customers who may otherwise not have even realised their bills are going up at the end of their contract. We all lead busy lives, so it's easy to lose track of these dates. Indeed, Ofcom stated one in seven customers (14%) don’t know whether they are still tied to their original deal and around one in eight (12%) believe they are 'in contract' but don’t know when this period ends.
Head of Regulation for uSwitch Richard Neudegg welcomed the new rules, saying: "While it has been a long time coming, this is an important step by the regulator to address what has long been a clearly unacceptable gap in the rules, penalising consumers to the tune of millions."
However, he also warned that customers should be wary of the deals outlined by their current provider in these notifications. While these may be the best that particular provider has to offer, they may not necessarily be the cheapest or most suitable on the market, so it still pays to compare broadband deals from other providers to ensure you're getting the best possible deal.
It's also important to note that consumers won't see these notifications immediately. In fact, Ofcom is giving providers until 15th February next year to implement the changes, which the regulator said will ensure providers can make the complex adjustments to their processes in order to send personalised and tailored information to millions of individual customers.
Therefore, anyone whose contract expires before then will still have to be proactive in seeking out the best deal to make sure they don't get stung by an out of contract price hike.