In a bid to put pounds back into consumer pockets, Ofcom launched their end-of-contract notification rules in February 2020.
The regulator estimated that this move has resulted in a drop in overpayments among mobile customers of c.£100m.
So, everything is now sunshine and rainbows? Not exactly…
The notification by the mobile networks, which can be sent by text, email or letter, must include the contract end date and current cost. Also, it needs to outline the amended tariff cost - which will be implemented when the user is automatically switched to a 30-day rolling contract - as well as any notice period required for changing to a new provider and the provider’s best deals, including any prices only available to new customers.
It is within the switch to the 30-day rolling contract that this screwed up or screwed over tale takes place.
Our MD, Klaus Henke, had two vastly different switching experiences, one with Tesco Mobile and the other with Three.
The Tesco Mobile switching experience was positive - his one year contract came to an end and, as per Ofcom’s legislation, Tesco Mobile sent a reminder email and then kept him on the same tariff, but moved him to a 30-day rolling contract. The result, no savings, but no extra cost. Fair enough, as his monthly fee was only £7.50.
Then came his Three experience… a very similar contract (also £7.50/month), but when this one came to an end, Three sent a notification and automatically switched Klaus to their standard 30-day rolling sim at £16/month.
So, what happened? Both networks had interpreted and implemented the Ofcom regulation with vastly different outcomes. It seems that Tesco Mobile took the rules to mean that at the end of their contracts, users would be kept on the same tariff, but on a 30-day rolling contract. Three, on the other hand, interpreted it as an automatic transition to their standard 30-day rolling tariff, which equated to a monthly bill that was more than double.
Klaus used Billmonitor to identify a more suitable tariff with Three and, after a call and some light complaining, he was switched to the new 12-month tariff of £7/month. However, this was only after he had incurred the higher rate for one month.
In theory the new rules, which came into effect in February 2020, are good, especially for those who purchased their handset on a 24-month contract and may pay £50/month or more. Those who are already on good deals, however, can be penalised unless they are paying close attention.
Whether screwed up (Klaus was at fault) or screwed over (Three was a bit shifty) our key message remains the same: when it comes to your mobile contract, you need to remain vigilant and shop around at the end of every contract period.