New ‘contract ending’ alerts could stop people switching

Broadband customers risk paying unexpected early-termination fees under new rules that force internet service providers (ISPS) to remind them when their initial discounted contract is coming to an end.

Telecoms regulator Ofcom is considering proposals that would oblige ISPS to contact customers between 40 to 70 days before their contract expires. This would give customers plenty of time to switch to another deal, rather than be automatically moved by their existing ISP to a more expensive package.

Research from comparison site uswitch shows the average price rise is 62 per cent. UK customers stand to save around £1bn a year by switching, it said, adding that three-quarters of people would switch provider if given enough time.

But uswitch warned also that being reminded too early would deter many customers from switching at that time because they would have to pay early-cancellation fees. It says this would lead to £845m in potential savings going unclaimed.

Instead, uswitch says being reminded between 14 and 21 days before a contract ends “would ensure customers can take action at the right moment”, and avoid fees.

Richard Neudegg, uswitch’s head of regulation, 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”.

ISPA, the industry body that represents ISPS, says it supports changes to the rules, but has argued also that customers staying with their existing provider can be due to satisfaction with the service, rather than not being bothered to switch.

Ofcom’s consultation on the contract reminders has now ended, and will be followed by a statement outlining new measures. It’s thought ISPS will be given until the middle of 2019 to make the changes.