17 June 2019
- New guidelines to help ensure telecoms and TV companies treat customers fairly
- Ofcom outlines work to tackle the cost of confusion in the market
New guidelines for broadband, phone and pay-TV companies, published today, set out how Ofcom plans to stamp out unfair practices.
Ofcom’s Fairness Framework is designed to explain to firms how we will consider whether their practices and the way they treat their customers is fair, and where we may need to step in.
The proposed framework aims to support companies in their work to improve customer service and put fairness at the heart of their business.
Preventing harmful practices
The Fairness Framework highlights the type of company practices Ofcom is most likely to see as unfair, and which may lead to regulatory action. One example is companies attempting to mislead their customers or take advantage of those who may be less able to choose the best deal for their needs.
The framework also sets out the kinds of issues we will examine when we assess whether a company is treating its customers fairly. These include the importance of the service in question; the degree of potential harm; and which customers are affected – for example, customers who may be in vulnerable circumstances.
Ensuring Fairness for Customers
The framework is the latest step in Ofcom’s Fairness for Customers programme, which recently saw all of the UK’s biggest providers make a landmark commitment to put fairness first and ensure their customers get a fair deal.
Ofcom has today published an update to this work. Progress so far includes:
- launching a review to ensure clearer, fairer deals for people who pay for mobile services and handsets together. This is a priority for Ofcom and we expect to consult on final proposals in the coming weeks;
- reviewing broadband pricing practices, examining why some people pay more than others – particularly those in vulnerable circumstances. We will announce our findings in the autumn;
- a new compensation scheme to provide money back for broadband and landline customers when things go wrong;
- clear, honest information for broadband shoppers – before they commit to a contract – about what speeds they will get;
- requiring companies to inform customers when their initial contract is up, and explain their best available deal;
- allowing mobile phone customers to switch provider with a text message from 1 July.
Tackling the cost of confusion
Ofcom has examined millions of broadband and mobile tariffs to assess which pricing practices are unfair.
The research reveals a complex market, with wide variations in how long-standing customers are treated. For example, some broadband providers charge long-term customers more than new customers, but other providers offer them their best deals – with significant savings also available if people sign up to new deals with the same provider. In mobile, more than a quarter of people on a long-term, monthly subscription would actually pay more if they switched to a similar SIM-only deal.
These variations mean there is a high cost of confusion among many customers. We are addressing this by requiring broadband, landline, mobile and pay-TV providers to contact their customer when their initial contract is up – and every year after that – explaining their options and outlining their best available deal.
We will publish further targeted measures on fairness, based on our evidence, in the coming weeks.
Sharon White, Ofcom Chief Executive, said: “Our fairness programme is delivering real benefits for customers – putting money in their pockets and helping more people get fairer deals.
“Everyone should expect to be treated fairly from their provider, but that hasn’t always happened in the past. There is now a real chance to change that.
“It’s vital we don’t chase the wrong solution to complex problems, which would see many customers worse off. So government, regulators and consumer bodies must all work together to ensure customers get a fair deal.”
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