Telcos have until the end of this year to lock landline and broadband customers into automatically renewed contracts after Ofcom kiboshed the practice. Currently, unless a punter opts out, some ISPs including BT automatically renew such contracts, and apply penalties to small biz and residential customers who leave their service …
Hooray! Ofcom doing something not-so stupid for a change.
Too little too late
As the title says. Why do they need time till Decemebr 2012 to achieve this? Can they implement this ruling immediately and do away witht e aggravation being cause?
How about adopting these ruls for Mobile Telcos also?
I don't think mobile companies do rollover contracts (where unless you specifically call them on a particular date, you get locked-in to another year or two)... unless you can specify specifics.
@Test Man - Yes sthey do!
The mobile operators are worse than anyone else in this respect. I know this from first-hand experience.
I can understand them wanting to lock you in for a year or so (usually to pay for the phone they they have just given you for free or substantially subsidised), and I don't really have an issue with that. What is annoying, of course, is that rather than reverting to a one month rolling contract after that, it reverts to a yet another year (or actually much more likely these days, 18 months or 2 year) contract. So if you want to cancel it, you can only do it in a short window every 18 months or so.
It seems to be unique to the telecoms industry that this practice has arisen.
As an aside, the other day I happened to stumble on a web site that compared all the available mobile contracts in the UK. They boasted "over 8 million" contracts. How can a single industry be THAT complex? It suggests to me that there is something very wrong with it.
autorenewals should be banned completely
lots of different companies are trying this now and the whole practice should be banned compeltey. Even my bloody car insurance and gym tried it with a cancellation period that you could never even guess at let alone actually remember a year down the road.
Any type of auto renewal should be banned as the sales rep often "forgets" to mention it and when you want to complain, suddenly it's "well our reps are trained to tell you and you must have forgotten"
Hopefully we'll get rid of practices like ARCs for good. Locking people into contracts after the expiry of the current contract is wrong. Generally people don't have legal, finance or purchasing departments at home that can keep track of these things and always remember to make sure they've gotten around to cancelling the auto-renewal.
I use a Google Calendar to set up long range reminders on the dates that the various long term things expire, including contracts, savings account special bonus rates, energy fixes, credit card 0% deals, etc. Set it up to email yourself a reminder a few weeks before so you have time to switch. I would prefer not to have ARCs but if you have any that aren't subject to the OFCOM ruling, this is one way to cope with them.
First year fine, why further years?
If I have a mobile contract I'm locked in for a predetermined time then the contract ends and I'm free to stay or move at any time. BT is just greedy. I've been a BT customer for 36 years yet it still wants to lock me in for a whole year at a time. Can't be for my benefit I feel
And what about
I cancelled and for 6 months they still debited and threatened me with bailiffs?
and I cancelled 2 months before the renew date
This was a nasty trick
You get a fixed phone with BT, they tell you it is a one year contract, which is annoying in itself. They tell you it includes free weekend calls. They then tell you that they can offer you free evening calls on top of that, for no extra charge, and "this is also a 12 month contract".
13 months later, when attempting to change to a different provider, you discover that the free evening calls was automatically renewable (although the basic line rental was not) and you can't get out of it for another 11 months, and are therefore stuck with the line rental as well. A dishonest trick, and I am glad it is being banned.
On the "December 2012" thing, I remember a few years back the Spanish terrorist organisation ETA one afternoon announcing that it was declaring a ceasefire "effective from midday tomorrow". This did make me wonder how many people they were planning on blowing up before midday tomorrow.
"'Man, we're already totally competitive', grumbles BT"
Well Mr BT, as spokesman for the default supplier of overpriced and poor quality broadband and telephony to the ill-informed and naive, can you tell me why your "BT classic" badged services are so much more expensive than the practically identical services from BT Sheffield (aka Plusnet).
A well known company with significant market power arranges to have a subsidiary with its own distinct brand, whose offerings are priced very aggressively, such that others in the marketplace find it difficult to compete with the low-cost (possibly even loss-making) offerings. Meanwhile the mainstream offerings remain an outrageous ripoff.
I believe it's sometimes called "predatory pricing". Perhaps Ofcom ought to be looking at that.
I don't like long-term contracts at all. In some cases, the telco actually provides something and the fixed-term effectively pays for it, but if you don't get this thing supplied (or replaced every 2 years like a handset), you get robbed blind with no get-out.
I'm more for you pay for your handset/router/installation/whatever, and there is no fixed term. If something changes you can leave at the end of the month.
I may just about accept something like the telco sells you the kit/installation and you pay for it monthly as a separate item on the bill for 12 months. If you leave early, you pay the remainder; when you've paid for it, the extra payments stop.
everybody does it
Blasted Saga car insurance does it. They wanted to charge me for cancelling after they renewed it without my permission.
I've been on one of BT's ARCs and it was fine. I chose to sign up in order to benefit from cheaper rates. It was made very clear at sign up that it was an ARC. One month before renewal I got a letter pointing out my options and making it very clear that if I did nothing I'd be stuck for another year. It was still the cheapest option so I let it roll over. The next time around (earlier this year) it was no longer as good a deal because my usage had changed. I moved to a different package that wasn't an ARC and BT didn't bat an eyelid.
I think it's a shame if people or other companies have been abusing the idea. It worked well for me and I was quite happy to trade a little freedom for reduced rental. YMMV :)
BT have definitely been 'forgetting' to tell people.
I discovered quite recently that I appear to be on an ARC, and I was definitely not told when I signed up, and have never been sent a reminder letter.
In fact, according to BT's claim above, I should have received the reminder letter last week.
Guess what - I didn't.
I almost got into one of these by accident. My ISP, Nildram, was taken over by Talk Talk Business. So this is a residential account, now being administered as if it is a business. There is no option to downgrade to a personal account. The contract terms remain the same until any changes are made to the account. Then you are in a 24 month auto-renewing contract. The cost to get out is £300 in the first year, £125 thereafter.
Thankfully I read the small print and got out before I did something stupid, such as upgrade speeds or change to a cheaper plan.
They arent legally enforceable anyway
As they rely on implied consent rather than direct consent (if you dont tell us we will renew you anyway) they are very difficult to enforce, the key problem being that if you argue BT and the rest of them will hold your line to ransom.
Here in Germany
They are absolute FUCKERS for this. Nearly every contract is auto renew. They do NOT send you a letter to say what your options are when you are near the end of it in most cases, they rely on you not remembering so that they can pull your pants down and shaft you again. I now have an extra year on a mobile contract (originally a 2 year contract with a 'free' mobile). They rang me 3 times trying to get me to agree to a new contract over the phone (which I would not have to sign anything for, they could do it over the phone). I told them 3 times I did not want a new contract and it would end on the last day. They renewed it anyway as in the small print you have to write them a letter to cancel it. And you have to give THREE MONTHS notice, WTF!
I am moving back to the UK soon, so will not need a mobile contract here, but according to them I have to pay up the contract IN FULL as they claim I can still use the service WTF!........... yes, I can still use the phone but it will all be roaming charges and I will not be able to use the call time and internet I am paying (a lot) for.
Absolute twatbags they are.
I never understood what the advantage to consumers was in these deals.
With mobile companies you understand a minimum term due to a subsidy being paid on the handset but where there is an existing line in perpituity there is no need to lock people in, other than to scare them off leaving.
Its like a partner tying their spouse to the bed, tv or cooker to prevent them looking for someone who'd treat them better.
Shows what a bunch of contemptuous, immoral sharks run BT and other shitty outfits who can't/won't compete fairly. Its shitty practices like this coupled with the inferior offering of xDSL providers which stopped me using any BT service about 5 years ago.
Its just a shame others aren't savvy enough to take their hard earned money away from them.
Or is that tosspots?
If it's unacceptable then Ofcom should ban it NOW.
If you really can't do it NOW ...
... then at least make it retrospective -- ie, in December all auto-renew "service-only" contracts no matter when signed immediately become terminable without penalty and hardware contracts become immediately terminable if and when they have been in force for a year.
Ofcom should have seen these contracts were anti-competitive the day they came in and could and should have put a stop there and then to them. They cannot claim not to have complaints. That they have taken such an unreasonably long time to put a stop to them is nothing more than a tribute to Ofcom's incompetence.
That they have deliberately delayed implementing the change is evidence of just one thing -- that Ofcom listens too strongly to the vested interests of the industry and ignores the general public that they were theoretically set up to protect.
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