Ofcom acts over broadband and phone contracts

The UK’s communications regulator Ofcom has taken action over Automatically Renewable Contracts on phone and broadband services to stop consumers from getting stuck in costly contracts and bring competition back to the market.

It has been announced recently that the UK’s communications regulator Ofcom has taken action over Automatically Renewable Contracts on phone and broadband services to stop consumers from getting stuck in costly contracts and bring competition back to the market.

An Automatically Renewable Contract is that which renews for another lengthy period automatically unless the customer actively opts out of the contract by contacting the provider when the current contract term is coming to an end. A number of providers operate in this way including communications giant BT but it means that many consumers get stuck in costly contracts that they then get financially penalised for if they want to opt out.

From the end of this year Ofcom is putting an end to these contracts both to protect consumers and also to bring competition back to the market. One industry official described the decision as great news, adding: “Automatic renewal was locking some consumers into services that were no longer suitable for their requirements and were often less competitively priced than newer offerings.”

Another said: “Relying on consumer apathy, providers have tried to cling on to customers by forcing people to opt out of a landline or broadband contract. Hopefully now the emphasis will be on providing the best service and support possible, so that consumers actively choose to stay with providers, rather than stay with them by default.”

Are you pleased that Ofcom has taken this action?

Source – BBC