ISPs slash charges to customers who cancel their contracts early

18 June 2010

cubiclemanThe three biggest ISPs in Britain have all agreed to lower their charges to customers who cancel their contracts early. Of course, this wasn't a collective altruistic decision, but rather, they did after regulators put the thumb-screws on them.

In the past, BT, TalkTalk and Virgin Media have made subscribers pay full (or thereabouts) for every month left on their contract in order to release them early.

However, from October (June 1st for TalkTalk) they will all charge you much less if you want to jump ship. With some packages the difference will be as much as 85 per cent less.

What we're looking at here is, for example, if you want to cancel your deal with TalkTalk's Essential home phone and broadband package, you would have had to cough up £33.48 for each month left on your contract. Now, if you want to break the deal, it'll set you back £8 per month. Much more reasonable.

Ofcom have been on at the ISPs for over a year in getting them to cut cancellation charges, being of the opinion that providers were breaching their obligations under the Unfair Terms in Consumer Contract Regulations 1999. Read Ofcom's findings here.

[Reg]

TOPICS:   Technology   How To Guides   Banking

12 comments

  • Alexis
    Yes, the remedy for breach of contract is to recompense the injured party to put them in the same position as if they breach had not occurred. ie. their actual losses. Wise people will be suing their ISP if they have left and had to pay at any time during the last 6 years.
  • Russ
    Technically cancelling the contract means that the ISP does not need to provide the service anymore meaning there costs are cut also... so really why should a contract exist in the first place?
  • Gordon
    A large part of the costs incurred by ISPs involve the setup of the broadband connection, hence the need for a contract to offset these costs. It's correct to say that they will save money when someone cancels early, but they'll also need to recoup these fixed costs.
  • Nader
    @ Russ, It's funny how it works, but ISP's actually work out there profit over 2 years, it vaires from ISP to ISP but it can take that long before they are making any serious profit...unless your family spends hours and hours on teh phone as they make alot of money from that... they will not like this at all
  • Laurz
    @alexis - but wouldnt that mean that if I had a 12 month contract at say £20 a month with my broadband provider and i wanted to cancel that contract after one month then their actual loss is is the full amount of the contract minus the first month? In other words to put them back in the same position as if i'd not breached my contract I should have to pay as if the breach hadnt occured so I should pay full price right?
  • Gunn
    @Laurz, I take it to mean that what costs will they incur for cancelling the contract, so it wouldn't be the full retail loss of contract it would just be the base cost to them. Which should always be lower.
  • OldMan
    erm... although this encompasses isp's who also supply phones, this ruling is only applicable to phone contacts, not broadband contracts.
  • bill b.
    £33.48 for each month left on your talk talk contract? Talk talks website says "the number of months left on your contract times the monthly charge, or £70, whichever is the least".
  • 3dtv
    You are failing to understand the business model of broadband providers. When you sign up to broadband, most providers are simply reselling a BT package. So they have to commit to a minimum term from BT. So yes, if you cancel after 1 month, the broadband provider is still out of pocket for the remainder of the contract (probably 12 months). Hence the high cancellation charges.
  • dunfyboy
    Shit A Brick! Ofcom actually managed to get someone to do something? Wonders never cease.
  • abbie
    Does this mean you save on home phone's but not broardband,can they charge a lot for cancelling broardband
  • rob25
    After spending TEN POUNDS on mobile phone call to 3Broadband and getting no joy on cancellation. They just kept repeating over that I would have to pay the remaining charges due and they would not budge on this. Threats of legal action met with stony silence the operative knows it is being monitored. Equally my plea that 3Broadband upgrade to 15MB was not enough usage and I was going for Unlimited Broadband because 3Broadband do not a plan for Unlimited Broadband. Before my mobile phone ran out of credit I posed the question What happens if I choose not to pay anything? Having stated that all I wanted was a reasonable and just settlement. Is it to far fetched to consider the fact that today I was totally blocked from the 3SITE no matter how I tried I could not login, I will fight 3 in any way possible from letter templates from WHICH? To free legal aid from Citizens Advice Bureau. I am not pulling a sob story but I am in a wheelchair in a care home with the use of just one arm. The laptop is my constant companion and I need Unlimited Broadband. I have offered to pay a just settlement for termination. They have laid down the game plan and I will fight it with with the tools of the law. Come on if we all make the law work for US we will overcome

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