Are you trapped in a Rollover contract?

roll-over-contractThere is a lot of choice in the UK market at the moment, and it’s a great time for you to look at cutting telecom’s costs. If, like our customers, you are implementing VoIP – then you could cut ongoing monthly bills for lines and calls, by as much as 80% …

However, if doing this entails changing your Telecom’s provider, you may be in for a shock!

You may think that you’ve been with your Telecom’s provider long enough to see the ‘Initial Period’ of your contract long-gone. So – you get your quotes and decide to change your phone system and services – and inform your existing provider that you want to cease your lines and port your numbers. Sounds easy, but then … (queue theatrical thunder/lightning effect!)

Caught in the Storm

… your existing provider tells you that your contract has ‘rolled-over’ into another 12 month period, and if you want to cancel your contract, then you’ll need to pay an ‘Early Termination Charge’ of hundreds or even thousands of pounds! When you question this, you’re told that if you want to cease your contract, you’ll have to do it within a ridiculously tight window around the anniversary date of your contract [which – 9 times out of 10, has only just passed!] …

If you think that this just doesn’t sound fair … you may be right!

ofcom-logoYour service provider should be aware that Ofcom carried out a serious review of rollover (a.k.a. Automatically Renewable) contracts and early termination charges in 2011, as these were seen as restrictive to consumers (i.e. making it difficult to change supplier), and generally harmful to the industry.

Ofcom has prohibited ‘Automatically Renewable Contracts’ (ARC’s), in the provision of fixed voice and broadband to small business and residential sectors of the market in a Statement that was published at the end of 2011.  The sale of ARCs was prohibited after 31st December 2011, and Ofcom required that ARCs be removed from the market (i.e. customers on these contracts be migrated to another contract), by 31st December 2012.

If your business has less than 10 employees, then a service provider is prohibited from selling you an ARC to cover the provision of your lines and/or broadband. This doesn’t stop the service provider imposing a Minimum Contract Period and rolling the contract on at the end of that period, but, Ofcom regulations now insist that your provider must gain your ‘Express Consent’ for this to happen and ‘notice’ periods must be stipulated for both parties in the contract. It might be for example, that your provider can offer you a mutually beneficial deal if you do enter into a rolling 12 month contract – but, regulations have changed the automatic [customer-led] opt-in nature of these contracts, putting the onus on the provider to advise the customer of the roll-over – and putting responsibility with them to gain customer consent to roll the contract forward into another year …

In short, if you want to change your provider of; lines, ISDN, VoIP and/or broadband, and you are told that your contract has ‘rolled-over’ and you will face a penalty charge for cancelling your contract – you need to ask your provider how their restrictions upon you moving your services apply with respect to Ofcom regulations (referencing: The Communications Act 2003 – General Condition 9.3) – and you need to have your service provider give you proof that they have sought, and that you have given ‘express consent’ for the rollover. If you are not given adequate proof of your liability, then avenues are open for you to escalate your complaint to Ofcom. On most occasions, when pressed – you might find that you are within your rights to make the changes you want to, when you want to – and you’ll only need to comply with minimal notice periods.

Just remember, that if it doesn’t seem fair, it probably isn’t!

We are telecom’s experts here at Foxhall, not Lawyers, so if you do find yourself in this situation, give us a call at 01787228402 (or use our Contact Us page), and we can provide some general advice, and then point you in the right direction to get the help you need.

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