/ Technology

Have you been stung by rollover contracts?

Phone locked with padlock

Landline and broadband deals that lock you into a never-ending loop of rollover contracts could soon be banned by phone watchdog Ofcom. And none too soon, say we!

Ever tried reading the reams of small print attached to most landline and broadband contracts? No? Can’t say I blame you. As Which? telecoms specialist, I have to do this far too often, and it’s enough to cause eye-ache and brain befuddlement.

Happily, one aspect of some phone contract T&Cs that really set my teeth on edge could soon be banned.

Complaints of rollover phone contracts

More than a year back, I started seeing complaints – from Which? members and other sources – about auto-renewable or ‘rollover’ home phone contracts.

Further investigation revealed that some home phone service providers were automatically renewing contracts after the original minimum term had come to an end. Customers were then locked in unless they opted out before the renewal date. Some people only discovered this when they tried to leave, and were hit with hefty early termination fees.

Some of the companies I received complaints about were less well-known providers, such as eZe-Talk. But the UK’s biggest home phone operator, BT, was also in on the act (and still is, according to Ofcom).

And what reward were BT customers getting for locking themselves in to an ever-renewing 12 month contract with hefty cancellation fees? Inclusive anytime calls, with an annual value of – at the time – just £33.

On principle, I’ve nothing against companies offering incentives or lower fees in exchange for longer tie-ins. In a financially-challenging world, it can keep costs down for those of us who are watching the pennies. But what I do have a problem with is companies putting the onus on us to opt out of repeated tie-ins, rather than asking us politely if we’re happy to stick with them for another minimum term.

Bring on the auto-renewal ban

I’m thrilled to say that I’m not alone. Back in March 2010, Which? published the results of our ‘renewable contract’ investigation, and shared our findings with phone and broadband watchdog Ofcom.

As with all things regulatory, the wheels of change have been slow to turn. But turn they have, and Ofcom’s just published proposals to ban opt-out contract renewals in any form in the landline and broadband sectors.

There will doubtless be arguments from some corners of the industry that it will stop them offering their customers such good deals. But on the other hand, if less people are locked into renewable contracts, they’ll be free to switch – which could promote better competion.

I also reckon that the best companies use excellent customer service and good value deals to keep customers loyal, rather than relying on contract renewing tactics that I think are sneaky at best.

Our research into phone and broadband satisfaction backs me up – the majority of Which? Recommended home phone and broadband providers offer package options that only ever tie in their customers for a month or less at a time.

Fingers crossed Ofcom gets its proposals through.

Comments
Profile photo of cat m
Member

Yay! Three cheers for this being picked up.

I am exceptionally cautious about being locked in to long-term contracts generally. In fact, I think I could safely offer that I shy away from such contracts 99% of the time. It’s a complete consumer turn-off and companies that only offer such contracts or indeed penalise me financially if I don’t take out such contracts get short shift from me.

Bug bear rant over 😉

Profile photo of scott1984_fp
Member

Personally You should be able to switch freely & without fines & penalties,As long as You pay your bill for that month only & All call phone calls made.

Member
Pula says:
4 March 2011

Great this! I was caught out a year ago and had to go to great lengths to get out of the contract. Struck me as outrageous to be locked into a new contract without ever being asked. When I approached BT they claimed I had given tacit consent but then could give me no evidence of how that was meant to have happened.

Profile photo of tonymm
Member

Hi,
I remember when I first started on broadband and phone sevice with TalkTalk. The contract was for
12 months but they were asking me to agree to a 3 year contact on my last renewal date- I didn’t
agree and kept it to 12 months. But I am not satisfied with the download speed I’m geting, it’s slow
at 1.2 MBPS. They blame the distance between my address and the server. Apparently, the further you
are from the server base the slower your connection or download speed is going to be.
But, as I have said before, why should those of us who are further away from it have to pay
the same connection fees as those who reside closer to the server base who are enjoying much
faster speeds. I complained about this to TT but to no avail. This should be investigated by the watchdogs. Tony Moody.

Member
HF says:
9 March 2011

This is the way broadband works. The longer the telephone line is, from your house to the local exchange, the greater the line loss, therefore the lower the speed your line can support without dropping connection. This is the way adsl works and there really would be nothing for Ofcom to investigate. An investigation by an essentially toothless watchdog can’t miraculously change a technology.

Optical Fibre connections to the home (currently being rolled out by BT in certain areas) may change this.

Profile photo of tonymm
Member

Hi, Thanks for your comment ‘HF’ and the info. However, You seem to have slightly missed the
point. I understand your explanation about the ‘line distance info.’ But my argument is
with the unfairness to those of us who are a long distance from the exchange but are paying
the same charges as those who are closer to the exchange centre, and who are receiving a much
faster connection speed. Those who are further away from the exchange should not have to pay
the same amount as the fortunate few. This is unfair and should be regulated by the watchdogs
as the broadband providers are laughing all the way to tha bank.

Profile photo of Ceri Stanaway
Member

Hi Tony,

You’re certainly not alone in this frustration – just head on over to one of our many conversations on broadband speed – eg https://conversation.which.co.uk/technology/no-ones-getting-the-broadband-speed-they-pay-for/. I’m not an expert in broadband economics, but one of the possible problems with doing this is that although it does seem incredibly unfair on people who live a long way down the line, it probably doesn’t cost ISPs any less to deliver their broadband to homes further down the wires.

I believe there’s much more should be done immediately, though, in advertising realistic limits rather than theoretical speeds that are impossible to achieve for most people – and we’re encouraging the Advertising Standards Agency to get this sorted.

There is also some possible hope in the future if fibre broadband is rolled out across the UK, particularly to areas that currently suffer with speed. It doesn’t suffer the same deterioration over distance, so people a long way down the line will get very similar speeds to those close to the exchange. Unfortunately, roll out of a fibre network is going to take some time though.

Member
Hettie says:
8 March 2011

Why don’t you highlight this on Which Mobile? This site seems less impartial than I’d expect of which.

Profile photo of tonymm
Member

Hi Hettei, Thanks for the advice but I have no connection with which mobile at the moment.

Profile photo of Ceri Stanaway
Member

Hi Hettie,

The reason we haven’t highlighted the issue of rollover contracts on Which? Mobile is that Ofcom’s proposed ban doesn’t include mobile contracts at present – only landlines and fixed line broadband. However, having read your comment I asked Ofcom about this yesterday. It said the reason it hadn’t included mobile (and presumably pay TV too) was that the evidence it had gathered didn’t indicate there is currently a problem with automatic rollover contracts for mobile (of course, there is the issue of ridiculously long mobile contracts, but this is being dealt with separately by EU regulations). However, Ofcom said that it would definitely frown on other telecoms sectors – such as mobile – introducing auto-renewable contracts and would be quick to respond if so.

And just to reassure you that Which? Mobile is completely independent and impartial. If you’d be interested to share your views on Which? Mobile in more detail, it would be great if you could take our survey: http://blogs.which.co.uk/mobile/mobile-phone-tariffs/help-us-improve-which-mobile/ – just click on the blue link saying ‘Take the Which? Mobile customer survey’.

Member
moaner says:
9 March 2011

in the past few years i was stupid enough to let Norton 360 renew and only saw it on my bank statement. i did a bit of price checking and found the same thing available £30 less !
how they can justify automatically selling it to loyal customers at almost twice the going price seems bordering on criminal. the same thing nearly happened the next year although i was sure i turned that option off.
the AA also tried to put me on a rolling contract. i requested not to be on it and after some discussion managed to get money off. the next year they also tried to charge me full price on the rolling contract even though i requested to be removed for a third year in a row. grrrr !

Profile photo of tonymm
Member

Hi Moaner, This is what you must look-out for these days- backstabing by ruthless money grabbing
companies who if you are not watching will take your last penny.

Member
Jamie Curle says:
15 March 2011

I’ve just been stung by the same tactic here. BT’s response has been corporate and disappointing.

I took out a contract in December of 2008 and I was never informed of the rolling contract. I never received any letters advising me the contract would be renewed.

I had no idea that I was on a rolling contract and this has to be stopped, it’s sneaky.

These people need to be brought down, their terms and conditions are not above the law and we need to fight against these parasites.

Member
Phil says:
15 June 2011

Same problem with BT. Just went to cancel full bt phone broadband and vision contract today…. No issue with phone and vision but told that I had 9 months left to run on broadband as I had automatically rolled my contract for another year 3 months ago. Thought this practice had gone out with the Ark or only now practiced by lowlife companies. I am only cancelling as moving abroad and having sung the praises and got others to join…feel cheated. This was never spelt out to me originally as would never have agreed to it and was certainly not warned at end of first year. To have a national institution behave like this is disgusting!

Profile photo of junkkmale
Member

There are many out there – http://www.reviewcentre.com/reviews140628.html – the key would appear to be to amalgamate and coordinate, as the authorities seem either powerless or (telecom humour) otherwise ‘engaged’.

Coming to the conclusion of a personal trial that has lasted several years, and will share the outcome once clear.

Member
Cynic says:
8 December 2011

If people forget to cancel when the contract ends and get automatically renewed then surely these people would still forget if the contracts did not auto renew, get ready for people trying to use their phones and broadband only to find that they have been disconnected because they are out of contract. I imagine there will be just as many complaints.

A good idea would be for people to READ THE T&C’s, make a diary note of contract dates and stop expecting our nanny society to save you from yourselves.

Member

Cynic – How can someone complain they’re disconnected if their contract has come to an end? It’s like complaining to Thomas Cook ‘cos you have to return home once your holiday’s over.

Member

I thought my 24 month internet contract came to an end in December 2011 – but I’ve still got it in 2012. It’s rolled over. I never heard of this concept. I wasn’t asked. If I stop Direct Debits they can’t do anything can they?

Member
Cynic says:
5 January 2012

P, It is not like complaining about coming home from a holiday because that is what you bought. In any agreement you enter in to you always know what you are agreeing to because you read the contract dont you?

If you do not know about the rollover in your broadband contract then it must mean that you didn’t read it and if that is the case then is that not your own fault?

Every agreement like this either has something like “I have read and understand the terms and conditions” on it or if it is on a website it has a tick box to confirm you have read them. If you tick the box without reading the contract then you deserve everything you get.

The point is, if you are in a contract then the contract must have been made available to you in some form or it would not be enforceable, READ IT. Do not enter into an agreement without reading the contract and if you dont bother to read the contract then dont complain if you have a nasty surprise.

As for stopping direct debits, that is just a way to pay you will still owe them the money.

Profile photo of junkkmale
Member

I think you may find that solely pointing at a contract, whose manner of engagement and/or whose terms may have been subsequently been deemed onerous, is a less than productive route to hang an argument upon. Though one can see how some may find merit in focussing in this area alone.

It will be interesting to see how such an aggressive view of ‘the law’ is sustained when such as Which?, Martin Lewis and various broadcast entities throw their weight behind exposing the abuses and sharp practices that abound.

Plus I always suspect karma has a special ironic treat in store for those so passionate in defence of t&cs… only in areas that suit.

P… with the help of my MP I took on my previous provider and prevailed. And now their Ombudsman and OFCOM’s risible roles in ‘helping’ only their paymasters is also under scrutiny.

The rolling roll over, and the ‘you need proof of posting; we don’t’ issue, especially when it comes to failing to advise renewals, is under the spotlight.

Member

Cynic – This is a sociopathic attitude. It borders on the callous. Do you think Thomas Cook expects their customers to pour over small print when they book a holiday?… or, as an honest and reliable household name, do they make use of a thing called a “sales advisor” to explain everything to them? This is the tradition of buying and selling. Business works a lot of the time on good faith. They don’t want to bore their customers… it’s bad for business. It makes no business sense.

And if this is the culture of deceit… Does this mean an illiterate or someone with learning difficulties can never take out a contract and if they do it’s “their own fault” if they get stung by something that wasn’t deliberatly explained to them? You have a misanthropic attitude.

“As for stopping direct debits, that is just a way to pay you will still owe them the money.” I may still, on a weak legal basis, still owe them money, but that doesnt’ mean they will have the will or even the right to obtain it.

Member

Cynic – You argued that if there were no roll over contracts people would still complain that their internet has went off… therefore it is the equivalent of complaining that you have to return home from your holiday after your 7 days are up… Are you suggesting that we should introduce ROLL OVER HOLIDAYS? Cancel your booked and paid for 7 days one day before you’re due to return or have another 7 days added. lol

Member
Cynic says:
5 January 2012

The point is, act like responsible grown ups. Make sure what you are agreeing to is what you want and you do this by reading the agreement. If Roll Overs are part of the agreement and you dont want that then dont buy it, get it from somewhere else. If you do buy it then dont moan about it later.

I simply dont understand how you can complain about something you agreed to in the first place.

Profile photo of junkkmale
Member

Possibly not the full extent of your lack of understanding.

Phone companies have vast amounts of money invested in and at risk over such poorly worded, sold and policed contracts, that in other industries would be laughed out of court over.

And they are making money hand over fist by using legal sledgehammers with no concern for the awful industry reputation being created. Which explains, but does not excuse the legions of lawyers and PRs deployed to try and distract from the abuses being committed, and names being named.

The downside is the extent the establishment still tolerates it. The upside is how poorly these highly-paid smokescreen merchants are at their jobs. Evidently.

Member

“Make sure what you are agreeing to is what you want and you do this by reading the agreement.”

Cynic – How many customers do you think Vodaphone or Phones4You would acquire if everyone walking into their stores poured over the small print? Answer: None. They know this. It’s unpractical too. The advisor is there to explain to the customer the contract… or is it unreasonable to trust and expect the sales advisor to do this?

What your’e saying, therefore, is unethical and belongs to a shark mentality. Everyone, including OFCOM, disagrees with you. What about people with learning difficulties? What about the illiterate? Beautifully naive or vulnerable elderly? You’re suggesting a culture, as a matter of course, where a paradigm exists in which the consumer MUST AUTOMATICALLY DISTRUST big companies. Great PR man you’d make.

The real point is… BT and the other service providers have deliberatly, as policy, verbally omitted certain details when selling a contract with the sole intent of hoodwinking their prospective customers. They took advantage of the consumer trust in them… and the knowldege few people ever bother read the small print in the first place… (They word it so badly) The only fault on behalf of the consumer is that he expects transparency, that he has had good faith and believed that a 12 or 24 month contract means… a 12 or 24 month contract.

Member
Cynic says:
5 January 2012

I do have a very good understanding of this and work with contracts everyday. A poorly worded/misleading contract would probably not be enforceable if tested.

The point you are missing/avoiding is that people agree to these contracts without reading or understanding them and then complain about them when they do not like the result. If you say “I agree” and “I understand” then who is to blame? The company offering the contract or the consumer who is not telling the truth.

The biggest problem is not that the contracts need changing or making clearer, it is the consumers that need educating to read what they are agreeing to and if in doubt ask for clarification before agreeing to something.

Profile photo of junkkmale
Member

I am sure this is an area of expertise for you.

“consumers that need educating to read what they are agreeing to ”

Good luck with that. I’ll leave you with your own words. Though marketing, and maybe even legislators may be keen to chip in.

Member
M Shafiq says:
5 February 2012

I am sick of these rollover contracts with landline telephone companies. When you sign the contract and you ask them how long the conract is for, they will simply say 1 year (or 2, depending on contract) but they will never advise you that you are signing a rollover contract and should you wish to leave you will have to notify us within certain period of time or pay the early termination fee of about £180.
There should be a ban on rollover contracts and the consumer should have the choice of terminating the service any time after the intial period of contract.

Member
Patboy says:
16 May 2012

I was on an auto-renewing contract due to expire end April 2012 so on January 2012 I e-mailed BT that I did not wish to renew it. BT refused my notice and told me I had to ring Customer Services to find out my options. On hold for ever so e-mailed again, notice again refused, so wrote a letter to the BT specified address in UK for complaints giving written notice, had an e-mail reply from non-UK centre telling me I had to ring CS as “they will not accept notice by letter” !!! Asked for deadlock letter 5 weeks ago. No reply. Is anyone still alive in BT to do anything?