Ofcom demands clarity on telecom charges

February 28, 2016

Communications regulator, Ofcom, has produced draft guidelines for telecom and internet firms, regulating the additional charges companies can demand from customers.

The regulator devised the new rules in response to complaints from customers about additional charges for paying bills by cheque or cash, ending contracts early or paying bills late.

Under the guidelines, which cover home phones, mobile phones, broadband and pay TV, any extra charges must be clear and demonstrably fair. Limits will be put on some charges, in order to protect customers.

Companies will have to make extra charges prominent and transparent, so that consumers can easily understand the overall cost of buying a telecoms service.

Under the new rules, additional charges for the late payment of bills should only be applied if the customer has had a fair chance to pay the bill. The charge must also reflect only the cost of collecting the payment.

Similarly, charges for the early termination of a contract should never exceed the payments left under the contract period, and should often be significantly less than this amount.

Ofcom’s final guidance is expected to be published later in 2016. Telecom companies will then have to comply with the rules within three months, or face legal action under the 1999 Unfair Terms in Consumer Contracts Regulations.