Ofcom Ban on Roll over contracts ?

john1

Ofcom today set out proposals to ban automatically renewable contracts that tie consumers with landlines into repeated minimum contract periods unless they opt-out.



Ofcom is concerned that rollover contracts make it harder for customers to switch providers and consequently reduce the benefits of competitive choice.



The full news release can be found here: http://media.ofcom.org.uk/2011/03/03/removing-barriers-to-switching-proposals-to-end-rollover-contracts/



The consultation can be found here http://stakeholders.ofcom.org.uk/consultations/arcs/ and closes on 12 May 2011.

DVardysShadow

So they are not completely useless then.

The regrettable thing about this is that they are doing this on grounds of competition rather than on grounds of consumer protection. If the consumers get shafted, Ofcom don't care, just as long as there is a level playing field for the corporations.

Ypaymore

"Automatically renewable contracts that tie consumers with landlines into repeated minimum contract periods unless they opt-out are to be banned under proposals set out by Ofcom today.
These contracts, also known as rollover contracts, are currently offered by BT, and several smaller providers, to both residential and business users of landline services in the UK. The contracts automatically roll forward to a new minimum contract period – with penalties for leaving – unless the consumer actively opts out of the renewal.
Ofcom estimates that approximately 15 per cent of UK residential consumers are on rollover contracts.
Ofcom is concerned that rollover contracts make it harder for customers to switch providers and consequently reduce the benefits of competitive choice. For individual customers, this can mean that switching is made unattractive as the costs involved are unexpectedly high. For the market generally, it means less competition as it is harder for competing providers to attract customers on rollover contracts and therefore their ability and incentive to create lower cost and higher quality services is reduced.
Changes to regulations

Ofcom is proposing to amend its existing rules in relation to contract terms to prohibit opt-out contract renewals in any form in the landline and broadband sectors. If Ofcom proceeds with its proposals, providers who continue to offer this type of contract could face enforcement action including a financial penalty of up to ten per cent of turnover.
The consultation can be found here http://stakeholders.ofcom.org.uk/consultations/arcs/ and closes on 12 May 2011."




Source: http://media.ofcom.org.uk/2011/03/03/removing-barriers-to-switching-proposals-to-end-rollover-contracts/?utm_source=updates&utm_medium=email&utm_campaign=AutoRenewContractsNews

Buzby

The REAL issue is consumers NEED to respond to the OFCOM consultation and explain either that they were caught out, or that it prevents them from accessing competitive services. If you do not, they may take this as disinterest and the fact it isn't a 'live' issue.

They've already dropped the ball on differing billing amounts based on how you pay your bill - with these dubious (Payment Processing) intermediaries - don't let this happen again!