Home movers fork out on phone bill

Alongside unemployment, bereavement and divorce, moving home is one of life’s biggest causes of stress. And it’s not surprising, as new research from uSwitch.com reveals that home movers face a hidden cost of at least £44 million – just to get a phone line set up in their new home.

A study of six major home phone companies reveals that no policy is the same as the next when it comes to moving house. With over 10 million consumers locked into minimum term home phone contracts in the UK, uSwitch.com lifts the lid on how unfair policies in the industry have left home movers in a ‘lose lose’ situation. Unless a customer holds a contract with BT, Pipex or Toucan, those moving home face the unpleasant choice of having to either pay almost £195 just to continue their telephone service at their new address, or pay a hefty exit fee to terminate the agreement with their existing provider.

With around a quarter of customers currently tied into a minimum term contract with their phone company, most households opt to stay put with their existing provider when they move house rather than risk a hefty ‘exit’ fee. This relies on getting a phone line up and running at the new property. Just three companies are so committed to keeping customers on board that they will set them up on a phone line at their new home (regardless of where they are moving to in the country). Two companies would rather push customers into a 12 month contract with an alternative landline provider than support them during the moving process, and cable phone customers have just a 50% chance of being able to continue the same service at the same cost when they move.

However, this problem affects a wider demographic and is set to worsen as local loop unbundling (LLU) proliferates. The process has become more complicated and more expensive since the introduction of LLU – a process where phone lines are made available to companies other than BT so that they can offer services such as broadband direct to the customer.

If a customer moves to a house where the previous owner’s line is unbundled, Openreach – BT’s wholesale arm – has to carry out engineering work to take the line back over from the LLU provider before it can be activated. As a result, a charge of up to £124.99 is passed back to the customer. uSwitch.com estimates that at least 350,000 customers have moved to homes with unbundled lines this year, at a cost of £44 million.

Steve Weller, Head of Communications Services at uSwitch.com, comments: “With 44 million consumers relying on a landline to make calls at home, Ofcom urgently needs to grab this issue by the neck. It’s unacceptable that loyal phone customers are effectively being thrown back onto the streets when they decide to move home.

“Over the last year the number of unbundled phone lines has shot up from 1 million to over 3 million. As a result, three times as many consumers are now being stung. With broadband companies planning to unbundle more and more lines over the next year, this issue is set to spiral. We advise home movers to check whether the phone line at the new property has been unbundled, so that they can factor this additional cost into their moving budget. Consumers moving into a new-build or house conversion, where no line exists, will also have to cough up to get a line installed.”

Managing the process

As telephone lines are now owned by Openreach, in theory, any phone company can arrange for a line to be activated at a property, eliminating the need for customers themselves to come into contact with BT Retail (unless they are already a BT customer). BT Retail, Pipex and Toucan, carry out this process on their customers’ behalf. While any charges will still be passed on, customers can move in the knowledge that the arrangements are being taken care of and that they will be able to resume their phone service with the same provider - although they will have to sign up to a new minimum term contract of at least 12 months.

Worst Offenders

TalkTalk and Tiscali, with nearly 4 million customers between them, place the onus on their customers to do the legwork before they can resume the service at their new home. Line rental customers have to contact BT Retail themselves to set up their landline, and on doing so are tied into the terms and conditions of a BT Retail contract. As of 1st May this year, this means that they are liable to a minimum 12 month contract. Should they wish to leave BT to resume their service with TalkTalk or Tiscali, they must pay up to £70 in exit fees.

The situation is no better for Virgin Media phone customers. With the company’s cable network only reaching 50% of homes, cable customers still within their fixed contract, but moving into a non-cabled area, have two choices. They can either take up Virgin Media’s landline phone service, setting themselves up on a BT phone line as a first step, or they must pay their way out of their existing Virgin Media contract – even though it is through no fault of their own that they can’t continue with a cable service.

While a home movers’ process already exists, Ofcom acknowledges that some companies ‘for operational reasons’ choose not to follow it. Under the current regulation, companies can simply steer away from the guidelines and force customers to fend for themselves when they move home. uSwitch.com is calling for regulation that:

- forces phone providers to fully adopt the home movers’ process to enable customers moving house to retain their current provider at minimal cost and inconvenience

- forces phone providers to waive any ‘exit penalty’ for home movers within their minimum term contract.

Weller continues: “It’s time for phone companies to start facing up to their responsibilities and stop passing the buck. Companies are more than happy splashing out to acquire new customers, but are prepared to drop them in a flash as soon as the going gets tough. It’s clear that having to set up a phone line on the customer’s behalf when they move is either too expensive or too cumbersome for some companies to bother with. They would far rather drop the customer and cherry pick a new one that is already nicely settled on a BT line.

“The hero of the hour is the self-labelled ‘friendly’ phone company Madasafish, which takes customers into its fold whether they have a landline or not. If they don’t, it makes all the necessary arrangements to set customers up and they are free to leave after a month without having to pay an exit fee – although, with line rental and unlimited evening and weekend calls for £9.99 a month, customers may well decide to stay put.”