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How do I get out of my rollover contract?

Our Broadband Expert says...

Some 15% of home consumers are on a rollover contract for their landline, estimates regulator Ofcom, and BT (www.BT.com) is by far the biggest supplier to offer these kinds of contracts.

What is a rollover contract?

Broadband and home phone providers offer two types of contract; a rolling contract or a rollover contract. Rolling contracts, or “automatically renewable contracts”, as they are also known, are used by providers to lock a customer in for a minimum contract period.

This is usually either 12 or 18 months and, once the minimum contract period has ended, you can carry on using the service or simply switch to a new supplier - though you may need to give 30 days’ notice.

However, a rollover contract will automatically tie you in again for the full contract length when you come to the end of your initial broadband or phone contract, which might be 12, 18 or even 24 months.

You do get a switching window, but this is usually only around 30 days, and once that window has closed, you can’t switch again for another 12 months or so - unless you're willing to pay a hefty cancellation fee.

Fighting rollover contracts

These controversial contracts have come under fire from consumer groups and Ofcom. “The contracts automatically roll forward to a new minimum contract period - with penalties for leaving - unless the consumer actively opts out of the renewal,” explains the telecoms regulator.

“Ofcom is concerned that rollover contracts make it harder for customers to switch providers and consequently reduce the benefits of competitive choice.” Ofcom is now considering banning rollover contracts.

However, for the time being, providers that do offer rollover contracts simply have a duty to make sure that customers know how the contracts work and when their 30-day switching window is.

For example, BT should write to you explaining that you're coming to the end of your contract. Ofcom says that this letter should:

• Be sent at an appropriate point in time - normally a month before you minimum contract period is due to expire to give you enough time to switch
• Be written in a plain, easy-to-understand language
• Make it clear what you need to do to opt out of the rollover contract

Getting out of a rollover contract

If you end your contract during the cancellation window, you will be able to switch without incurring any fees. However, if you miss this window you will have to pay a charge to get out of your BT contract.

The amount that you’ll have to pay will depend on how many months you have left on your contract, as well as the actual package you're signed up to.

Here are some examples of the monthly charges you might have to pay to leave your BT broadband bundle early:

What does BT say about rollover contracts?

Despite the criticisms suppliers have faced over rollover contracts, BT says it is disappointed that Ofcom is proposing a ban on “renewable contracts”, arguing that customers are happy to receive the “free” evening and weekend calls they get when they sign-up.

“We have worked hard to make sure that customers understand what they are signing up to, including how the renewal works and the charges that apply if they choose to leave early,” says the provider.

“In exchange for these terms, customers get a significantly lower price, and as the renewal date approaches we contact them to give them 30 days notice to end the contract without charge.”

BT isn’t planning to end rollover contracts without a fight. “We hope to persuade Ofcom to think again,” says the provider, “but if we don’t succeed, then we will be letting existing customers know over the next few months what BT can offer them as an alternative.”

Unfortunately this means that if you've just been tied into a new 12-month rollover contract with BT, you will now have to wait until next year’s switching window - or pay and exit fee.

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