Ofcom has given phone and broadband companies a good thrashing with the banning stick. The telecoms regulator has banned landline and Internet rollover contracts, contracts that automatically renew themselves.
These automatically renewable contracts (ARCs) rely on the fact that no-one keeps tracks of the date the contract ends to lock you into an extended contract. But now Ofcom has put a stop to that kind of shenanigans.
A rollover contract works like this: you pick a phone provider, sign up for a twelve-month contract and get on with enjoying your phone calls and Internets. Cut to a year later, there or thereabouts, and you think to yourself "hey, I barely use the ol' landline since I got my shiny new mobile phone. It's been more than a year, I think I'll ring up and cancel". You ring up and cancel.
Except Johnny Rollover at the phone company tells you that a year has indeed passed, and your contract has automatically been renewed -- for another twelve months. And cancelling the contract now will cost you a fee.
Quite the wizard wheeze, we think you'll agree.
Ofcom estimates that roughly 15 per cent of the country's homes are on rollover contracts. Companies that rope customers into self-renewing contracts include BT, Adept Telecom, Axis Telecom, Eze Talk and iTalk, while TalkTalk Business, Titan Telecoms, and Optimum Calls offer ARCs to businesses.
ARCs will be banned from 31 December, on pain of a good shoeing from Ofcom's aggro department. If you're currently on a rollover contract you'll be moved to a different deal, and they won't be sold from the new year onwards. By then, all contracts will be required by Ofcom to contact the customer to see if they want to continue, and you'll have the option to stick or twist with no penalty for choosing to end the contract and look elsewhere.