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.
