Saving those pounds: UK regulator to clamp down on expired contracts

• Customers will have to be told that they’re leaving money on the table
• Service providers will have to explain options
• Brits may be forced into embarrassing negotiations

UK regulator Ofcom has decided to move on the vexed issue of consumer service contracts and the dark art practiced by service providers of letting them run on when they have expired.

Under suggested new rules, service providers (that’s all of them: fixed line phone, broadband, cable, mobile and bundles thereof) will have to contact customers as they approach the end of their contract and appraise them, by phone, email or letter,  of what changes, if any, are going to be made to their terms and conditions (the price in most circumstances). Then they will have to let them know their options, especially those that might save them money.

As things stand in the UK providers don’t have to do this and so many don’t. As a result Ofcom estimates that there are over 20 million customers sitting on ‘out of contract’ services and around half of those are on deals with automatic price increases at the end.  Ten million customers paying several pounds a month more than they probably have to... you do the sums.

Ofcom wants to get over the idea that the ‘end of contract’ is a chance for the customer to negotiate a new deal. The old deal having already been comfortably paid off to cover the cost of the customer’s acquisition and his or her device (phones, WiFi hubs and so on).

Brits are notoriously bad at negotiating - not an option that many seek or enjoy once they have it. So whether a letter or two will act as a significant spur to renegotiation is yet to be seen. In any case the regulator will now consult on the proposals until 9th October 2018, by which time the operators will have a chance to work out how they’re going to deal with the proposals.