Landline companies forced to slash charges for leaving service

BT, TalkTalk and Virgin Media have agreed to reduce the cost of exiting their landline contracts early under pressure from Ofcom.

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by Victoria Bischoff on Jun 18, 2010 at 08:06

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BT, TalkTalk and Virgin Media have agreed to cut charges for consumers leaving their landline contract early by up to 85%, Ofcom announced yesterday.

The telecoms watchdog said under regulations ‘termination charges’ should reflect the costs providers save by no longer providing the service.

Landline providers BT, TalkTalk and Virgin Media said they do not believe their early termination charges are ‘unfair.’ However, under pressure from Ofcom they have agreed to reduce their charges.

The regulator warned other landline providers that if they failed to follow suit and reduce their early termination charges they could face formal action.

As each provider has different costs, termination charges will vary.

TalkTalk introduced its new early exit fees on 1 June, dropping charges from between £33.48 and £14.44 to £8 and £3. BT and Virgin meanwhile will cut their fees in October.

Cheaper charges will also apply to landline customers who receive broadband in the same package.

Peter Phillips, Ofcom’s partner for strategy and market developments, said: ‘We very much welcome the reductions made by BT, TalkTalk and Virgin Media which mean that consumers will face much lower charges if they wish to end their contracts early’.

Mike Wilson, mobiles and broadband manager at moneysupermarket.com, said: ‘People can be taken in by a cheap deal or freebies and easily find themselves tied into long contracts. 18 month deals are becoming commonplace and with the landline and broadband markets moving so quickly, people can often find they are no longer on the best deal shortly after signing up to a new one’.

Wilson said Ofcom’s new rules to cut charges will help people move freely to better deals for their landline and broadband services.

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4 comments so far. Why not have your say?

This is wonderful news for all those customer tied into that mistakenly described "organisation" BT. I look forward to the earliest possible date I break away from that dire collection of ineptitude.

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I am probably BT's target market - 2 offices 2 home lines, 4 mobiles. I got an £85 cancellation charge off BT. They may think this is clever business, but fool me once more shame you, fool me twice more shame me. BT - you will never ever have my business again. Is that good marketing?

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Presumably this does NOT affect those with a contract. I know of one charity which had a BT One-bill contract covering phone and internet and they were charged about £590 to terminate their service - due to office closure.

BT simply said they were "being held to contract" and would accept no arguments for reducing this cost for nearly 2 years of non-service. What a rip-off! Always read the small print!

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Andrew Edgington

Jun 18, 2010 at 13:39

The utility companies may not consider their early termination charges unfair, but what surely is unfair is the way they keep you locked in to a contract indefinitely. A minimum period is fair enough, but it is completely unreasonable to repeatedly extend the lock-in period once the minimum term has expired and I believe this practice should be banned by Ofcom. Contracts always used to be open-ended once the minimum term had expired and I believe this should be the norm.

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