Penalty-free broadband & mobile provider switching secured by Ofcom

Ofcom has succeeded in its bid to make it cheaper for business users to switch between landline, broadband and mobile service providers.

As previously reported by IT Pro, the mobile regulator has been intent on curbing the practice of making customers pay penalty fees when switching providers for some time.

Following a lengthy consultation period, the organisation has got its way by ruling customers should be allowed to exit contracts with providers without being penalised.

This is in the wake of the monthly price rises introduced by several major mobile operators over the past year, which have prompted many users to consider switching to alternative providers.

However, it is claimed the threat of penalty fees has stopped some from making the move, forcing Ofcom to intervene and publish guidance on the issue.

The document states that if providers want to increase their monthly subscription fees, customers should receive at least one month's notice of the changes and be allowed to exit the contract without any penalties being imposed.

Furthermore, it stresses that any changes to contract terms should be clearly, and transparently communicated to customers, and not hidden away in the small print.

"Ofcom will monitor providers' application of the Guidance and complaints closely to assess the effectiveness of this new protection," a statement from the regulator reads.

"Ofcom will also conduct research, such as mystery shopping, to assess the transparency of contractual information given to customers by providers at the point of sale."

The organisation has also published a need-to-know guide to help consumers get the most of the new rules, which lists a series of things they should bear in mind before signing up to a new landline, broadband or mobile phone contract.

They include checking the pricing terms and conditions, and ensuring if these were to change they can still afford to buy the service off the provider.

Claudio Pollack, consumer group director of Ofcom, hailed the move, claiming it will ensure consumers and SMBs have greater protection against unexpected price rises.

"Additionally, our new guide highlights important factors customers might want to consider before entering into a new contract to help them understand exactly what they are signing up to," Pollack added.