Telecoms firms plan to stop customers saving money

MOBILE phone and broadband companies are resisting a curb on rip-off bills under which they will have to tell customers that their contracts have ended, it can be revealed.

From next year, telecoms customers will receive alerts telling them they could save hundreds of pounds by moving to another deal because their current offer is up, under rules being consulted on by Ofcom. At present, companies do not have to tell customers that they could get a better deal by switching.

However, telecoms companies are planning to bury the warnings deep inside monthly bills and in online accounts which customers rarely log into which could leave them unaware that they are paying more money, industry sources told The Daily Telegraph.

This is despite Ofcom saying the socalled “end of contract notifications” must be issued as stand-alone texts, emails or letters. On average, around six million phone customers pay an unnecessary £22 a month because they have already paid for their handsets, rising to £38 extra for smartphones, according to Citizens Advice research.

One in five customers only realise after six months, by which time they will be £228 worse off.

Similarly, most broadband providers quietly move customers on to a more expensive tariff when their contract is up, leading to them unwittingly paying over the odds. An estimated 15million households are currently out of contract with their broadband provider.

According to uswitch research, broadband customers on “standard” speed packages face an average overnight price rise of 62per cent – or an extra £152 a year – the day after their contracts expire.

BT Broadband customers face the biggest rise with the monthly fee rising by 82per cent from £24.99 to £45.49 once the contract has expired. Last night, Ofcom said: “Our proposals are very clear that customers should receive a stand-alone alert that they are coming to the end of their minimum contract period. This should be sent to customers separately from their bill or other service messages.”

Richard Neudegg, the head of regulation at uswitch, said: “It’s important to warn consumers that they are moving on to these higher rates. Broadband customers say they’d shop around if they knew their deal was coming to an end. Consumers expect similar notifications from other industries, so why should it be different with broadband and mobile contracts?

“Providers benefit if customers are in the dark about when they could seek out better suited deals.

“Ofcom’s consultation on how to implement these notifications must ensure that crucial information doesn’t get buried in the small print of bills, or isn’t shown at all.”