Ofcom reviews additional charges on customer bills

Ofcom has today launched an industry wide review of additional charges made by communications providers on customers.

Consumers face additional charges from their provider above those they already pay for the service – whether home phone, mobile, broadband or pay TV. These additional charges can be due to a number of factors, including:

Not paying by direct debit;
Late payment;
Having service restored after it has been restricted or suspended following late payment; or
Early termination fees (terminating a contract within the specified minimum contract period).

Following complaints from consumers, Ofcom is launching an own-initiative review of these charges. Ofcom will examine consumers’ awareness of and attitudes to these types of charges. The review will consider whether additional charges are sufficiently transparent, whether the charges or their levels are unfair and what action, if any, is necessary.

Ofcom Chief Executive, Ed Richards said: "Consumers of communications services see headline prices fall. But they must not be misled. As they make their choice of provider, they need confidence that any additional charges are fair, transparent and justified."

Chris Frost, Communications Expert at price comparison and switching service uSwitch.com, commented: “We have raised the issue of ‘hidden charges’ on several occasions and are delighted that Ofcom is to launch an industry-wide review of this matter. This is long overdue.

“Consumers have for too long been the victims of sneaky charges such as paying more for receiving a paper bill, paying late, or paying by cheque rather than by direct debit. Many of these charges are monthly and over the year will add up significantly.

“Moreover it is often the most vulnerable customers that bear the brunt of these charges. For example, those customers who pay their bill late are often in financial difficulty. The increases we have recently seen by some providers to late payment fees are a hard swipe at these customers in particular.

“Many of the charges Ofcom is reviewing are often hidden in the small print. Customers often don’t realise that they are liable to pay them until they are locked into a long term contract. It is our hope that, as a result of this review, consumers will be made aware of charges up front. This will allow them to compare deals like for like with other suppliers.

“We hope that other industry watchdogs will follow Ofcom’s example and by launching investigations of their own. This issue isn’t confined to the telecoms industry.”