Will Ofcom changes make business telecoms switching easier?
Ofcom has announced new measures designed to increase the ease with which consumers can switch provider for broadband and landline services.
With regulators applying pressure to force major companies in their respective industries to act more responsibly, Ofcom has moved to make it easier for customers to switch their broadband and landline providers.
Under fresh measures that are set to be enforced by the regulator from early 2015, people will only have to contact their new supplier in order to switch their contract - but how does this differ from the existing system and what's the benefit for consumers?
Under the setup that's already in place, anyone who wants to change their provider for broadband and landline services has to contact their current supplier and let them know of their intentions.
The issue here is that companies don't make the switching procedure easy. It may seem cynical to assume that the process is purposely made complex in order to deter customers from looking elsewhere, but plenty of evidence exists to suggest the tactic has intentionally been employed by providers in the past.
For example, suppliers have previously hit customers with cancellation fees as high as £150 - but these aren't necessarily enforceable, and are more an attempt to stop people in their tracks if they think signing up to a new provider is going to save them money.
Another issue is that companies will occasionally block switches. This forces the customer to call up their outgoing supplier, at which point they will most likely be offered a win-back deal as firms attempt to hold onto clients.
"It may seem cynical to assume that the switching process is purposely made complex in order to deter customers from looking elsewhere, but plenty of evidence exists to suggest the tactic has intentionally been employed by providers in the past"
This is essentially a policy of aggressive retention, and its first signs were evident when rollover contracts were banned 18 months ago and providers searched for other ways to maintain customers without losing money. Further problems are related to extensive notice periods for cancellations, with some known to have been as long as three months.
Going through changes
Once Ofcom's measures come into effect, the good news for consumers is that they'll only have to contact their new supplier, who will then arrange the switch for them. The days of going backwards and forwards will come to an end - but the fear is that providers will merely find a new way to complicate things, much like they did when rollovers were abolished.
This is a particularly important consideration in the current climate, as a shift is happening in the world of energy, too - British Gas and npower have both announced an end to the way in which they roll their business customers onto new contracts.
While the decision may have been made in good faith, there is a risk that energy companies which end their rollover systems simply follow the example set by the telecommunications industry and make switching a more difficult process than it already is.
Ultimately, this would mean businesses find themselves no better off as a result of rolling contracts being abandoned - the system would change, but problems wouldn't be solved, and small firms could continue to pay over the odds for their energy.
Much of this will depend on how transparent suppliers are with the rates that are available to their customers - or how easy they make it to switch - and if confusion continues to blight the industry then questions will remain.
That's why it's important to keep track of your contract, key dates and rates. And whether it's for energy or telecoms, if you want to be sure of finding the best deal then use our free service that will take care of everything for you.
Image credit: Donovan Graen
Dan O’Sullivan is Make It Cheaper's Web Content Manager, which means much of his time is dedicated to ensuring we have plenty of online material to help business owners understand the energy, insurance and telecoms industries. With years of experience working alongside SMEs, Dan is committed to making life as easy as possible for smaller firms. You can email Dan at email@example.com
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