Broadband, phone and pay-TV providers will be required to notify customers when they are close to the end of their contract, after telecoms regulator Ofcom set out plans for new rules to improve transparency.
Providers will be required to contact customers between 10 and 40 days before the end of their contract date to alert them. The provider will then be obliged to alert customers again annually, if they do not take any action.
The rules, which apply to pay-TV, broadband, mobile and landline providers, also obliges companies to notify customers about the price they are currently paying, the end date of their contract, any change to the price when the contract ends and the current best deals offered by their provider.
Ofcom says consumers are losing out by being loyal to the same provider and staying out of contract, and that this information can help to change current consumer behaviour around switching to become more proactive.
Ofcom's figures suggest that nearly nine million broadband and TV and broadband bundle customers are collectively overpaying by £1bn each year because they are out of contract. It believes the new rules could benefit as many as 20 million customers.
Across the sector, Ofcom found that more than 10 million customers are in deals which have an automatic price increase after the contract ends. Our analysis of broadband prices found that the price of the average deal rose by 28% after the introductory contract period ended.
We support Ofcom's proposal to introduce notifications as a way to help people make informed decisions about their telecoms services.
Natalie Hitchins, Which? Head of Home Products and Services, said: 'Until now many customers have found themselves paying over the odds for staying with their provider after their initial contract has ended - so notifying people in advance that they may be about to be hit by these poor value rolling tariffs is a step in the right direction.
'Providers should be fighting hard to show that they deserve to hold on to their customers, not hitting them with an unexpected price hike the minute their contract is up.
'Anyone nearing the end of a contract should compare prices to see if there is a better deal available - switching suppliers could potentially save you hundreds of pounds a year.'
At Which? we do all we can to support consumers with quality advice across the entire range of provider services.
If you are looking to save on a new broadband package, use Which? Switch Broadband to , such as the £100 Amazon voucher Vodafone is currently offering on its packages. If you are thinking of switching, don't forget to to see if you can improve your current deal.