Auditel Consultant:
Adrian Burton

Landline and Broadband Early Termination fees cut

22 Jun 2010 | Filed under: Uncategorized

Ofcom has finally acted to prevent unfair penalty charges being placed on customers leaving telecoms contracts covering broadband and landlines early. Many telecoms suppliers historically locked customers into longer term contracts and then had punitive cancellation charges to ensure they remained for the duration. In a world where telecoms are constantly changing and prices falling this has been excellent for telecom suppliers, but not good for consumers.

Communications providers have always had obligations to meet under the Unfair Terms in Consumer Contract Regulations 1999 (the Regulations). What Ofcom has now done is give their interpretation of the Regulations, deciding that consumers who end contracts early should never have to pay more than the payments left under the contract – in fact they should often pay less, to reflect the costs providers save because the contract ends early.

This ruling was drawn up after 18 months of discussions with the main providers BT, Talk Talk and Virgin Media and could mean that customers save up to 85% when cancelling contracts early.

The battle now for Ofcom is to get some of the small suppliers to follow suit as this is where the worst offenders for unfair penalty charges probably sit.

The only downside for the consumer is that with suppliers not being able to guarantee revenues on long term contracts it might ultimately put some of the pries up in the package deals on offer