Mobile operators would be required to inform customers when their minimum contract term is close to concluding under proposed rules from Ofcom.
Under existing regulations, providers of mobile, broadband, landline and television services are under no such obligation. This means that consumers whose introductory offer has expired or who can get a cheaper deal elsewhere after paying off a handset might be unaware of their options.
Ofcom estimates there are more than 20 million communications customers outside of their minimum term and 10 million whose deals will become automatically more expensive thereafter.
Out of contract
The proposals would mean customers get a notification via their medium of choice – SMS, letter or email – between 40 and 70 days before their contract expires.
“We’re concerned many people are paying more than they need to – particularly those who are out of contract,” said Lindsey Fussell, Ofcom Consumer Group Director.
“Customers have told us they want to be alerted when their phone, TV or broadband contract is coming to an end, and get advice on their options. Under our plans, providers would have to do exactly that.”
To appeal to consumers concerned about paying too much for their mobile contract, a number of operators offer ‘flexi’ tariffs that separate the cost of the handset from the airtime. Once the handset portion has been paid off, customers only pay for the airtime component.
However research published by uSwitch earlier this month suggested that these tariffs were still more expensive than a comparable SIM-Only deal. uSwitch said that Ofcom’s proposals on minimum term notifications “couldn’t come soon enough”.
The regulator will consult on the proposals until 9 October.
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