Broadband, phone and TV firms must now warn you when you're out of contract – but don't wait to switch
Broadband, TV, mobile and home-phone companies must alert customers when they're close to the end of their contract or out of contract under new rules from the regulator, aimed at preventing people from lingering on rip-off deals. But the best prices are still to be found by those who take action – and switch.
Ofcom says about 20 million broadband, TV and phone customers are out of their initial minimum-term contract, meaning many overpay by £100s/year. It adds that every day, 25,000 broadband customers come to the end of their contract – usually meaning they're rolled on to a more expensive plan.
But from tomorrow (Saturday 15 February), firms will have to warn customers that their contract is almost up. Those already out of contract must be reminded each year.
These alerts must also show the deals available to new customers, though not all firms will actually offer these to existing customers. Crucially, they'll also just show the monthly cost new customers pay – they won't factor in switching incentives you often get via comparison sites, such as bill credit, cheques or vouchers.
This is particularly important for broadband customers, which means switching to a new deal with another provider will almost certainly be the best option for you.
What are the new rules?
Under the new rules, telecoms and pay-TV companies will need to send customers a letter, email or text between 10 and 40 days before their contracts end. Yet as some firms require 30 days' notice to switch away, the onus is still on you to make sure you know when your deal ends.
If customers are already out of contract or choose to stay with their provider once they're out of contract, they'll be sent a reminder every year about their firm's best deals. But providers will have up to a year to send the first notification out, so don't wait – check today to see if or when your contract's up.
Those on a 30-day rolling contract (eg, Sim only contracts) won't receive the same 'end of tariff' notification, but will receive an annual review if they've been on the same tariff for 12 months or more.
The alerts must include:
- The contract end date.
- The price customers currently pay and the price they will pay after their contract ends, as well as any changes to the service after this date.
- Information about notice periods if customers want to end their contract. This includes detail on how to end your contract, which should also make clear you can switch to another provider once your contract ends.
- The best deals offered by the provider, including prices available to new customers. But this won't always mean existing customers will be able to get their provider's best price – they're likely to get a better price by haggling or switching elsewhere.
BT, Sky, TalkTalk and Vodafone have said they will allow existing customers to get the same deals as new customers but only if they take out a new contract. However, existing Virgin Media customers will need to contact the firm to discuss their options as it won't guarantee they'll get new customer pricing.
I'm out of contract, how do I save?
If you're out of your minimum contract term, you CAN leave straightaway without paying any penalty, and there's a good chance you can save by switching to a better deal.
For example, out-of-contract BT customers with its basic 10Mb broadband pay upwards of £45/month, but new customers or those willing to take out a new contract can get faster speeds (30Mb) for £24.99/mth.
Alternatively, if you're willing to stick with your provider, you could always try to haggle a better deal. In February 2019, TV and broadband providers took four of the top 10 spots in our poll on the service companies customers had most success haggling with. For example, 84% of Sky customers who responded said they'd had success when haggling. See our Broadband Haggling guide for more.
What does Ofcom say?
Ofcom's consumer group director Lindsey Fussell 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. Just a few minutes of your time could save you hundreds of pounds today."