Ofcom broadband transparency rules will save money for 20 million customers

Ofcom has announced a new set of rules compelling broadband providers to be more transparent with customers about when their contracts are coming to an end and alerting them to their best deals.

It's the latest announcement from the communications watchdog after a flurry of other rulings over the past year, all aiming to govern telecoms companies to serve their customers better.

The watchdog's research shows that more than 20 million UK customers have passed their initial contract period which means that many could be paying more than they need to.

"Around one in seven customers (14%) don't know whether they are still tied to their original deal and around one in eight (12%) believe they are 'in contract', but don't know when this period ends," said Ofcom.

The new rules state broadband providers must alert their customers between 10 to 40 days prior to their contract ending.

The information will be texted, emailed or mailed to the customer and will include information such as the contract's end date, information about any required notice to give in order to terminate the contract and any changes to the price they pay after the end of the contract.

Customers that choose to stay on with their provider without signing up to a new contract will be sent an annual reminder of the provider's best deals.

"We're making sure customers are treated fairly, by making companies give them the information they need, when they need it, said Lindsey Fussell, Ofcom's consumer group director. "This will put power in the hands of millions of people who're paying more than necessary when they're no longer tied to a contract."

The announcement marks the implementation of the rules first set out in December 2018. "To make sure they get this right, companies will have nine months to make the necessary changes to their systems and processes," said Ofcom. "Customers will start receiving the notifications from 15 February 2020."

While Ofcom's steps to improve the consumer experience in the broadband sector might be great news for consumers and SMEs, with the advent of price comparison sites it could be argued that the onus shouldn't have to be placed on the businesses that exist to make a profit.

"Ofcom wants a fairer deal for consumers, which we believe we are delivering," said a Virgin media spokesperson. "We continue to give our customers increased value, which includes ongoing investment in our network as people want to do more with their ultrafast connectivity."

Other initiatives that Ofcom has launched this year include the automatic refunding of internet outages. Broadband providers voluntarily sign up to the scheme which takes the arduous process of going through customer service to make a reimbursement claim away from the consumer or SME.

SMEs rely on a stable internet connection to conduct business in the modern climate, but many of which have no need for a dedicated business line meaning consumer contracts are more appealing. This, however, comes with the risk of slower speeds and more frequent outages.

Ofcom also launched tougher minimum broadband speed regulations in March, commanding providers to meet the guaranteed minimum speeds, otherwise, customers can breach contracts penalty-free. If no action has been taken after a month by the provider, the customer can exit the contract freely.