New rules could save consumers up to £150
Phone, broadband and payTV providers will be forced to alert people when their current contract is coming to an end.
The new rules, which come into effect today, could save consumers up to £150 a year.
Ofcom says around 20 million customers are already out of contract - including 8.8 million broadband customers – with many spending more than they need to.
It claims every day, 25,000 broadband customers come to the end of their contract, usually leading to an automatic price hike.
However, 16% of broadband customers do not know if they are in contract, particularly older people, with 21% of over-55s unaware.
The new measures introduced by the regulator will mean that home telecom firms must inform bill payers between 10 and 40 days before their contract comes to an end, via a text message, email or letter.
Currently, providers do not have to remind their customers when their minimum contract period is coming to an end or explain what will happen after the contract ends.
Customers who do nothing when their minimum contract period ends are likely to continue on a monthly rolling deal and can face price increases or changes to their original deal.
Lindsey Fussell, Ofcom's consumer group director, said: "Millions of people are out of contract right now and paying more than they need to.
"These new rules make it easier to grab a better deal. But you don't need to wait to hear from your provider.
"A few minutes of people time could save hundreds of pounds now."