Phone Contracts

Posted by Tom Cooper on 3rd March, 2011. Blog Categories, Communications & IT, Office Costs.

(1 votes, average: 5.00 out of 5)

Loading ...

Ofcom today (3-Mar-2011) announced it is proposing to amend its existing rules in relation to contract terms to prohibit opt-out contract renewals in any form in the landline and broadband sectors.

These Automatically Renewable Contracts (ARCs), also known as rolling contracts, are currently offered by many providers, to users of landline services in the UK. The contracts automatically roll forward to a new minimum contract period – with penalties for leaving – unless the customer actively opts out of the renewal.

If Ofcom proceeds with this proposal; providers who continue to offer this type of contract could face enforcement action including a financial penalty of up to ten per cent of turnover.

This proposal is subject to consultation, so in the meantime, users should be aware of their contractual commitments, the correct method of preventing rollover and any early termination penalty charges they could be subject to.

Also to be wary of, are contract terms being changed by letter and/or a statement insert as often these do not reach the appropriate person in the organisation.