SMEs given power to cancel phone contracts

New rules from Ofcom will enable consumers and small businesses to cancel phone or broadband contracts if their provider ups its prices

Ofcom today brought in new regulations enabling consumers and small businesses to exit their phone and broadband contracts if their provider decides to hike the price.

The telecoms regulator embarked on a review into the fairness of contract price terms and concluded that many consumers were “caught unawares” by rises in what they thought would be fixed price contracts.

As a result, it has issued new guidelines to landline, mobile and broadband providers, meaning they have to give customers a minimum of one month’s notice of any increases and allow them to cancel the service without any penalties if they so choose.

Claudio Pollack, consumer group director at Ofcom, said: “We have reached an important milestone in our work to ensure consumers and small businesses have better protection against unexpected price increases.

“Additionally, our new guide highlights important factors customers might want to consider before entering into a new contract to help them understand exactly what they are signing up to.”

The guidelines include checking with your provider for any additional charges, such as paper billing or caller ID, and to make sure you know how long you are tied into the contract for. You can find Ofcom’s advice here.

The regulator has also confirmed it will undertake more research, including mystery shopping, to see how transparent contracts are when customers first sign up.

Read more on Telecoms networks and broadband communications