Major changes are afoot in the broadband and mobile phone market, with the advent of end-of-contract notifications. So what’s changing? And how will if affect you? Read on and we’ll explain.
In a bid to clamp down on punitive out-of-contact prices and make pricing fairer and more transparent, a suite of new regulations have come into force.
The central plank of the revamped regulatory regime is that providers are now obliged to notify customers when their contract is about to end or has ended already.
So no longer will the onus be on customers to keep track of where they are in their contract term. From hereon in, it’s the responsibility of providers to make sure their subscribers know.
But that’s not the only thing that’s changing. Here we explain how end of contract notifications work and how you can make them work for you.
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Why are end of contract notifications being enforced?
In a nutshell, to make things fairer and to empower customers to shop around for better deals.
To explain why they’re necessary, let’s have a look at how broadband and mobile phone contracts work…
When you sign a broadband contract, you agree to an initial term. Which has traditionally been between 12-18 months.
Once this period ends, broadband providers have habitually hiked prices. So you’ll be paying more for the same service. Much, much more.
According to Ofcom, the out of contract price is on average 20% higher for broadband and 26% higher if you’ve got pay TV as part of your bundle.
That’s backed up by a Citizens Advice study in May 2019, which found that Britons are collectively overpaying by £9 million every day for their broadband.
Mobile phone contracts
On most standard 24-month contracts, when the minimum term is over you’ve paid off the cost of the phone in full.
Which should mean your monthly premium drops and you’ll just be paying for your monthly allowances, right? Wrong.
In fact, networks have traditionally neglected to cut out-of-contract customers’ ongoing monthly premiums to reflect that the handset is fully paid-for.
As a result, customers have been overpaying an average £182 per year for their mobile phone deal than if they’d switched to a SIM-only contract, according to Ofcom.
When should I receive my end of contract notification?
If you’re still under contract at the moment, expect to get a notification 10-40 days before your minimum contract ends.
If you’re out of contract with your provider already, you may already have received one.
And if you don’t take any action after that prompt, you’ll get a notification every year you remain out of contact to remind you of your contract status.
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How will I receive my notification?
Your broadband provider or mobile phone network will contact you by email, letter, or text message.
What information is in the notification?
As well as the contract end date, providers are compelled to tell you…
- The price you’ve been paying while you were under contract
- The new price you’ll pay once you’re out of contract
- Changes to the service they’ll provide in future (if any)
- How much notice you’ve got to give to end your contract (if any)
- The best deals on offer if you stay with your existing provider
Providers are also obliged to include details of all the services you take from them and whether cancelling one service from them could affect another.
The notification email must include instructions of how to cancel too and confirm that there’s no charge to pay for leaving.
Will I be told if I’m already out of contract?
If your contract has already expired, you’ll also get a notification from your provider to tell you you’re no longer under contract and are free to switch.
This will also contain details of your notice period, what you’re paying now and a full list of the services you take.
And you’ll be shown a selection of your provider’s best tariffs, too.
How have providers responded?
For years, a 12 month or 18 month contract was pretty standard when signing up for broadband.
But as a consequence of the new regime they’re seemingly on the way out, with some household-name broadband providers responding to the notifications by locking in future customers for longer.
Providers also appear to be hiking prices, amid claims that the new regulations will make business conditions tougher for them.
It’s worth noting too that some suppliers have claimed that the fresh regulatory regime could disincentivise innovation and prompt them to cut investment in infrastructure. This remains to be seen.
Mobile phone networks have responded more positively, by pledging to automatically transfer customers to better, cheaper deals when their contract ends.
Three has yet to announce a plan to reduce bills, prompting Ofcom to warn that Three customers will “continue to overpay and will not receive similar protections if they stay on their current deal".
What should I do when I get my end of contract notification?
Don’t delay is the answer. In the case of broadband contracts, the longer you stay on your existing deal, the longer you’re overpaying.
So we’d suggest you take action and start shopping around to see what’s on offer from other providers.
Use our broadband availability checker to see what’s available at your address and take a good look at our comparison tables, where we’ve flagged what we consider the best broadband deals at the best prices.
At the time of writing, all of the above are still offering broadband on 12-month contracts.
Need a bit of help switching? We’ve got you. Take a look at our one-stop guide and we’ll walk you through the process.
With mobile phone contracts, unless you’re with Three, your bill will be reduced automatically. But that’s no reason to stay with your network.
There’s still a good chance that you’ll be able to save money or get a better deal elsewhere, so it’s well worth taking a look around to see what rival networks are offering.
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