/ 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
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 😉

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.

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.

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.

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.

Member

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