Penalty-Free Switching

Following a consultation on the implications of long term contracts Ofcom has announced a strengthening of the rules in relation to price increases and switching. With effect from the 23rd January 2014, consumers and small businesses should be allowed to exit their landline, broadband or mobile contract without penalty if their provider increases the cost of their monthly deal.

The new rules don’t apply to non-price changes or to price changes outside the core monthly price.  However, Ofcom have announced that they consider changes to call, text or data allowances as being a price change. The guidance also only applies to new contracts entered into after the 23rd January date.

In announcing the change Ofcom Consumer Group Director, Claudio Pollack, said “Ofcom is today making clear that consumers entering into fixed-term telecoms contracts must get a fairer deal. We think the sector rules were operating unfairly in the provider’s favour, with consumers having little choice but to accept price increases or pay to exit their contract. We’re making it clear that any increase to the monthly subscription price should trigger a consumer’s right to leave their contract – without penalty.”

Although the new rules apply to smaller businesses, i.e. those with fewer than 10 employees, the economic climate makes it increasingly important for businesses of all sizes to operate with a measure of security and price control in respect of all of their costs. This is something which we are very aware of at Callagenix and is why we publish all of our prices clearly on our site.  In addition, our “try before you buy” option means that businesses can try out our service before committing themselves. This feature also enables businesses to determine the optimum settings before putting any change to their telephone pathways into practice.

Options such as internet telephony, or VoIP, can also help to keep costs down and in some cases can actually enable businesses to call for free. For example, calls from one Callagenix IP telephone to another are free whilst calls from a Callagenix IP telephone to a UK landline would, at the time of writing, be 2ppm. 

Best of all, because the Callagenix services are flexible, businesses only need to take up those services which they actually need at any stage in their development. With no ‘in case we grow’ services in the mix, businesses can optimise their telephony usage and then take on additional services easily and quickly as their needs change. Cost effective and flexible, it’s no wonder that many of our clients have been with us for over 10 years and that recommendations account for some 50% of new business.

Written by Tony Jenkins