NEWS & EVENTS

Telecoms regulator Ofcom's decision to forbid the sale of Automatically Renewable Contracts (ARC) for residential and small business customers is good news according to Deborah Brown, Partner at city law firm Roythornes.

ARC's are contacts which automatically renew unless the customer tells the telecoms operator that they do not wish the contracts to continue.  The contract is usually for a minimum contract period and if the customer wants to cancel before that time is up, there is usually a penalty to pay.

Ofcom estimate that 15% of residential customers are on such contracts and preventing them for fixed voice and broadband contracts will increase competition in the market and deliver better deals for small businesses.

Deborah, a Partner in the firms Business team said:

"One of the interesting statistics was that the Ofcom research showed that nearly 60% of customers on this type of contract were unaware that their contract had 'rolled over' into a new minimum period. 

This is good news for small businesses, which will have greater flexibility in choosing their telecoms provider.  It is a very competitive market and considerable savings can be made by shopping around."

The changes come in to force on December 31^st 2011, and apply to new contracts for residential customers and those businesses with no more than ten employees.