Checklist when taking out a new phone or broadband contract
If you’re thinking of signing up to a new mobile phone, home phone or broadband deal, there are a few things you might want to consider first.
For instance, will the amount you pay each month stay the same over the course of the contract, or do different prices apply at different times?
And if the terms, including price (or prices), you agreed to at the outset of the contract change or increase unexpectedly, what are your rights?
This guide sets out some factors you might want to consider before signing a new contract and explains what you can do if the price you agreed to at the point of sale increases unexpectedly.
Is the core subscription price fixed, tiered or variable?
The core subscription price – usually the price that you have to pay each month – is likely to be one of the most important factors in your choice of contract. It may be:
- Fixed – where you agree to a single price which is fixed for the fixed term of the contract e.g. £20/month for 24 months.
- Tiered – where you agree to pay different prices at different times, e.g. £x/month for the first 12 months and £y/month for the second 12 months.
- Variable – where you agree to pay a core subscription price for the fixed term of the contract, but the provider reserves the right to increase the price at its discretion.
No matter what type of contract, the core subscription price or prices you agree to pay should be provided clearly and transparently to you at the point of sale.
If you’re unclear as to what you are agreeing to, or are uncomfortable with the type of contract being offered, don’t sign up.
Increases to the core subscription price
Ofcom has issued guidance (detailed information below) about the rules designed to protect consumers from unexpected price rises.
As long as the price terms are clear enough at the outset, fixed and tiered contracts are allowed under the relevant rules.
This guidance says consumers on variable contracts should be allowed to cancel that contract without penalty if the agreed core subscription price goes up.
The table below shows the types of contract certain providers have told us they will be offering following our guidance. All the providers in the table who offer variable contracts have confirmed to Ofcom that their terms will allow consumers to leave without penalty if they increase the agreed core subscription price.
|Core Subscription Pricing Terms|
|Communications Provider||Fixed - single monthly subscription price which stays the same for fixed term of contract||Variable - right to exit contract without penalty if agreed monthly subscription price increases||Tiered - different fixed monthly subscription prices for different periods disclosed and agreed upfront|
Under Ofcom guidance which applies to contracts for fixed minimum periods starting on or after 23 January 2014, if your provider increases the regular (usually monthly) subscription price (or prices, if you agreed that different prices apply at different times) beyond what you agreed to at the point of sale, it should:
(a) give you at least one month’s notice of any such price rise; and
(b) allow you to exit the contract without penalty if you choose to exercise that right.
Price increases to services outside your agreed regular subscription price
The guidance does not apply to any price increases for services outside of the regular subscription price. These could include international calls, calls to Directory Enquiries or premium rate numbers where you’re charged on a call by call basis and billed each month on top of your subscription.
However, your provider must still consider the application of Ofcom rules and general consumer law to any price increases for such services. It must give you the opportunity to leave your contract if the proposed increase is likely to be of “material detriment”.
If it does not do this and you think that the relevant price increase(s) will have a materially detrimental impact on you because of your circumstances, you should raise this with your provider and provide evidence to support your claim.
Other things you could consider before signing a contract
- Exactly what do you get for your money? Does the contract include a usage allowance and what are the charges if you exceed this?
- Are there any extra costs – e.g. for paper bills, for caller ID, for retrieving voicemails, or if you make payment by means other than direct debit?
- How long are you tied into the contract for? Are you happy to sign up for this long? (The maximum initial duration of a consumer telecommunications contract is 24 months.)
- Is there a charge if you leave the contract early? How much is it? It shouldn’t be more than the payments left on the contract (and in some cases should be a lot less).
A good way to find out what deals are available is to check the price comparison sites accredited by Ofcom.
What other information should my provider give to me at the point of sale?
As well as being told the regular price or prices you are agreeing to pay, Ofcom expects providers to give consumers the following information:*
- a description of the service;
- the key charges (including minimum contract charges, and any early termination charges, if applicable)
- payment terms;
- the existence of any termination right, including termination procedures;
- the likely date the service will be provided, in case provision is not immediate; and
- any minimum period of contract.
This must be set out in a clear, comprehensible, prominent and accurate manner in writing, such as a letter or email.
If you enter into a contract during a sales call, in addition to giving this information verbally, your provider must send this information to you in good time following the call in writing ( e.g. a letter or email).* Please note that under Ofcom rules, providers are not expected to provide all this information to consumers for SIM Only mobile contracts (where the notice period for cancelling this contract does not exceed one month) for Prepaid Mobile Services (typically Pay As You Go Services), or for home broadband deals. General consumer laws do still apply.
How do I complain?
If you believe that a provider isn’t following Ofcom’s guidance or that you have been mis-sold a contract you should contact its customer services department and make a formal complaint. Always ask for a reference number when you make a complaint.
If you haven’t reached a resolution with the provider after eight weeks (or earlier if stalemate (“deadlock”) is reached), you may have the right to take your case to an Alternative Dispute Resolution (ADR) Scheme.
The provider must tell you which scheme it is a member of, or you can use our ADR checker
You can also contact Ofcom. Complaints data helps us to target our enforcement action against companies that may not be compliant with our rules.
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