New rules in place to end rip-off prices for telecoms customers

Today, new Ofcom rules come into effect that look to ensure 20 million telecoms customers are no longer overcharged for their broadband, pay TV or mobile phone service.

Until now, there hasn't been any requirement for providers to remind customers that their bills will increase at the end of their minimum contract period. From today, providers will be required to notify customers when their contract is coming to an end and inform them of the best alternative deals. Those who are already out of contract will also receive a notification - operators have a few months to stagger sending these out.

End-of-contract notifications are the latest in a series of initiatives Ofcom says are aimed at making the telecoms market fairer for consumers. While end-of-contract notifications will help customers stuck on poor-value tariffs, customers will still need to take action to ensure they don't overpay.

Natalie Hitchins, Head of Home Products and Services at Which?, said: 'Our research shows that far too many people are paying more than they need to for broadband, so this rule change to ensure people are notified before their contract ends - and potentially before their bills go up - is a positive step. Anyone who thinks they are out of contract, paying too much or not happy with their current service should not wait until they receive a notification, you might find you save yourself hundreds of pounds a year if you haggle or switch.'

Read our overview of the best mobile phone providers and best broadband providers, to see which came top in our own extensive surveys.

Why are end-of-contract notifications being introduced?

The aim is to ensure that customers stop getting overcharged for their broadband. Research conducted by Ofcom has found around 40% of customers are out of contract and likely to be paying more as a result.

With broadband, this happens because most providers will raise your tariff when your minimum contract period ends. In our analysis of broadband deals available from the major providers, we found that those who started a new contract this month will see their tariff rise by an average increase of 29% at the end of their minimum contract period. In the worst-case scenario, with a deal available from Post Office Broadband, the jump is 89%. More than two thirds of deals have a price rise when the contracted period ends.

Those who take out a mobile phone contract including a handset can end up overpaying because not every provider automatically removes the cost of the handset when it's technically been paid off.

These factors, combined with the year-on-year price rises that some providers employ, can mean that those who remain out of the contract for long periods only get rewarded with bigger bills.

What end-of-contract notifications will tell you

You will receive a standalone notification between 10 and 40 days before the end of their contract. If you're already out of contract, your provider must send you a notification and keep doing so each year. The notifications can be sent by text, email or letter but must detail:

• The end date of your contract
• The price you've been paying up until your contract ends
• Any changes to the price you pay that will occur when your contract ends
• Any changes that will occur to your service when your contract ends
• Information about the notice period you'll have if you want to end your contract now the minimum period is up
• The best deals offered by the provider - including those only available to new customers
• If you have a mobile phone contract that includes a handset, your provider will have to include at least one SIM-only deal.

It may seem strange that your provider will have to tell you about deals that are for new customers but Ofcom's hope is that this will help you to see if you are losing out and should consider switching provider all together. It's possible this may also affect whether providers only offer certain deals to new customers.

What should I do when I receive an end-of-contract notification?

End-of-contract notifications are a prompt to consider contacting your provider to negotiate on price or to switch provider entirely. Being out of contract usually means paying more - we found that people who either negotiate a new price with their provider or switch entirely save £120 a year on average.

So when your notification arrives, the main thing you need to weigh up is whether you're happy with your provider or not.

How to haggle with your broadband or mobile phone provider

If you are happy with your current provider, you should get in touch with it to negotiate a better price. Haggling can sound intimidating, but the process is straightforward. In most cases you can contact your provider over live chat if you don't want to pick up the phone.

Read our guide on how to haggle for the best broadband deal to discover the five simple steps it takes to negotiate a better price - or follow the similar steps needed to negotiate with mobile phone providers.

How to switch broadband or mobile phone provider

If you're not happy with your current provider, you should switch. This is a smooth process in the majority of cases - and in most cases, you only need to contact one provider. Broadband customers should read our guide on how to switch broadband provider to get started.

If your mobile phone contract has ended, you'll need to weigh up whether you want to upgrade to a new handset or move to a SIM-only deal instead. Get help establishing which is best for you using our guide to choosing the best type of phone deal.