Ofcom’s Director of Telecoms Consumer Protection, Cristina Luna-Esteban, explains why making sure you’re on the best phone or broadband deal for you has perhaps never been more important – and how we’ve made it easier to do so.
Here in the UK we benefit from having lots of different phone, broadband and TV deals to choose from – with a range of providers competing for our business. But keeping track of whether you’re on the best deal hasn’t always been easy.
Most companies offer packages that cover a set period. For example, you might see a broadband deal for £25 per month, which ends after 18 months. After that, the price you pay each month could increase and without changing your deal, you could find yourself paying more than you need to. This is easily done, especially with lots of household bills to keep on top of.
After reviewing the broadband and mobile markets carefully, we were concerned that many people found themselves in this situation. Particularly vulnerable customers, who were hit harder when it came to these ‘out of contract’ prices.
So we took action to address this problem in a couple of ways.
Firstly, we worked with providers to get them to change their prices for customers, once their initial contract ends – including for those who may be vulnerable. The changes companies have made have helped reduce broadband and mobile bills for millions of customers.
Secondly, we introduced new rules in February 2020 that meant providers must send all customers alerts to let them know they are coming to the end of their current deal. These alerts must tell you the price you pay now, what that will change to and importantly, the best deal available to you. With these details, you have all the information you need to avoid paying more than you need to – whether you take up a new deal with your current provider, or think it’s time to switch.
But what difference has this made? We’ve carried out a detailed study and seen really positive progress. For example, over one million customers have got themselves a better deal since the new alerts were introduced . There are now fewer broadband customers who are out of contract and paying more than they need to. And while in 2018 out of contract mobile customers with handset and airtime bundles were overpaying by a total of £182 million a year, this reduced to £83 million in 2020.
And there is good news for vulnerable broadband customers too, with the difference between the prices they pay once they are out of contract compared to their provider’s average price, almost halving.
Clearly, the picture changes depending which provider you are with and which deal you are on. Prices will be different, the packages on offer will vary – all signs of a competitive market. The key now is that you and I as customers are much better armed to take advantage of this and grab ourselves a better deal.
This has perhaps never been more important. People up and down the country have seen the prices of everyday goods rise – whether it’s their energy, petrol or food. And with the wider economy still recovering from the shock of the Covid-19 pandemic, many people are feeling the pinch.
So making sure you are on the best deal for you and not paying more than you need to can make a huge difference to keeping on top of your household bills.
We’ve taken action to help make this as easy as possible – putting pounds in people’s pockets in the process. And we’ll continue to keep a close eye on companies to make sure customers are being treated fairly.