Stuck in a phone or broadband contract you’re not happy with and want to cancel? You’re not alone. Many sole traders and freelancers have found themselves locked into agreements with hidden fees, unclear terms and difficult cancellation processes. However, the new Digital Markets, Competition and Consumers Act 2024 (DMCC Act) has kicked in, bringing with it some big changes aimed at protecting customers and making it easier to leave contracts if required. Here’s how.
Reminder Notices
The new rules state that to help reduce “zombie” subscriptions, telecoms providers must send reminder notices about renewals. These reminders must include details about:
- How much the renewal payment will be;
- When it must be paid;
- How the new amount differs from the last renewal payment;
- When the next renewal payment will be due; and
- How the contract can be ended so you can avoid having to pay the renewal payment
What Is “Drip Pricing” and Why Is It Now Banned?
Another thing the new rules ban is something called “drip pricing”.
Drip pricing is where businesses advertise a product or service at a particular price, but later on in the purchasing process they then reveal additional mandatory charges. These hidden fees often include setup charges, admin costs or installation fees, but the point is they should be disclosed upfront.
Drip pricing is not only annoying for customers but also means they often pay more than they first thought. It also makes it more difficult to compare prices against other providers.
In terms of telecoms contracts, drip pricing can come about when providers advertise a low monthly price but then don’t reveal the extra costs until after you’ve signed up. This lack of transparency can make it difficult for small business owners to understand the real cost of a contract and may lead to unexpected financial strain.
In future, if a company is found guilty of drip pricing, it may mean customers can more easily get out of their contract.
What Is The DMCC Act’s Approach to Drip Pricing?
The DMCC Act takes a very dim view on drip pricing and makes it clear that full and final costs should be clear to consumers from the start. According to the Act, any “invitation to purchase” – for example in an advert or promotional offer – must include the total price, to include all unavoidable fees, taxes and other charges. If certain fees cannot be calculated in advance, providers must explain how these charges will be worked out and when. This allows consumers to estimate the total cost before signing on the dotted line.
How The DMCC Act Simplifies Contract Cancellations
Beyond pushing for ultra-transparent pricing, the DMCC Act also aims to make it much easier for consumers to cancel subscription contracts, including those with telecom providers. Key provisions include:
Clear Cancellation Procedures
Businesses must now provide straightforward methods for customers to end their contracts. This means you shouldn’t have to work your way through complex processes or endure lengthy phone calls to cancel a service.
Customers must also have the ability to exit the contract “easily” – ie with a single communication. They are also automatically entitled to a 14-day cooling off period. Anything deemed shady, such as continually asking consumers if they are sure, or if they are happy to “lose their benefits” is unlikely to comply with the new rules.
In a nutshell, customers will have the:
- Right to cancel at start of contract (as under the CCRs);
- Right to cancel after a free trial; and
- Right to cancel when they renew.
Online Cancellation Options
If a customer has signed up to a contract online, they must now be able to cancel their contract the same way – ie. online. This makes sure that the process is as simple as the initial sign-up.
No Unnecessary Steps
Companies are also now not allowed to impose extra steps that are not reasonably necessary to bring a contract to an end. For example, requiring feedback or offering incentives to stay should not be conditions for cancellation .
These measures empower consumers to exit contracts without unnecessary hassle, boosting transparency and fairness in the marketplace.
What To Do If You’re Looking to Cancel Your Telecoms Contract
If you’re considering ending your telecoms contract under the new regulations, here are some practical steps:
Review Your Contract
Go through your agreement to understand the terms, including any clauses related to cancellation and fees.
Look For Any Hidden Fees
Determine if any mandatory charges were not disclosed upfront. Under the DMCC Act, these should have been included in the advertised price.
Get In Touch With Your Provider
Reach out to your telecom provider to initiate the cancellation process. At bOnline we’re always keen to help – the easiest way is to use our contact us page.
Keep Records Of Everything
Document all communications and steps taken during the cancellation process. This documentation can be valuable if any disputes arise.
Our Take On The New Rules
At bOnline we welcome anything that means our small business customers get a fairer deal. We’ve always aimed to keep our prices as low as possible whilst being up front about our charges and fees right from the start.
We’ll be keeping an eye on this latest legislation and if anything else changes we will update our website and procedures accordingly.
