This week will see Ofcom’s latest consumer-based initiative come into effect.
The end of contract notification (ECN) legislation forms parts of Ofcom’s developing fairness framework and is designed to protect customers from staying on the wrong deal after their contract ends.
What does it mean?
After February 15th, 2020, it will be mandatory for firms to tell customers when they come to the end of their contract - this includes everyone from TV service providers through to mobile networks. In addition, the companies will also need to disclose any changes in price that are about to kick in within your current arrangement, as well as what their top deal is. This would need to happen between 10 and 40 days before your current contract comes to an end.
This new legislation came about when Ofcom discovered that more than 20-million households had passed their initial contract period and moved onto more expensive rolling plans. Following Ofcom’s intervention, providers have pledged to cap rates for those who move onto rolling contracts, as well as stopping the practise of preferential rates being offered to new customers only.
These new alerts, which can be sent via text, email or letter, must include:
- The contract end date
- The price paid before this date
- Any changes to the service and price paid at the end of this period
- Information about any notice period required to terminate the contract
- The best deals offered by the current provider, including telling loyal customers what prices are available to new customers.
Of the new legislation, Billmonitor MD Klaus Henke says:
“A recent study shows that about 80% of mobile phone users check their messages within 15 minutes of getting up, which means that a lot of these users will now receive a message outlining contract end date and what they can save. In theory, this is great. However, there are some shortcomings here in the fact that information will only include details for the current provider, not the best deal in general. Also, the ECNs only extend to consumers, not businesses. While this is another positive step from Ofcom, there is still a long way to go before the mobile industry can be considered fully fair and transparent.”
More info on the new legislation here.