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Consumer contract changes 'could save customers money'

Broadband, TV and phone customers will be given the chance to avoid hefty price hikes when their contracts end under rules taking effect on Saturday.

UK watchdog Ofcom says users could save £150 a year on broadband alone once they are informed of alternative deals.

Around 20 million customers are out of contract with their suppliers, leaving many paying more than they need to.

The regulator says people can earn big monthly savings if they are told in advance of discounts on new deals.

Matt Powell, editor at comparison site Broadband Genie, said the requirement for companies to warn when contracts are about to expire would help loyal customers remain on the best plans.

"Many broadband deals are sold with discounts for the initial contract term, and although these are often good value for the first 12 or 18 months, the cost after the discount ends can be substantially higher," he said.

"Regularly switching will let you take advantage of the latest offers and perhaps get you a faster connection. And if you don't want to switch, you should always negotiate with the provider at the end of your contract term to see if a better deal is available."

Some 25,000 broadband customers come out of contract daily, usually leading to an automatic price rise.

Ofcom says the new rules, which come into force on 15 February, could help consumers save £150 or more on their annual bills.

Service providers will need to text, email or write to their customers between 10 and 40 days before their contracts come to an end, giving details of:

  • the date their contracts can be terminated without penalty
  • the price they have been paying
  • any changes to the price or service that come into effect automatically after that date
  • how much notice they need to give to cancel the deal
  • the best alternative subscriptions on offer, including the prices charged to new customers

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