Landline telephone contract fees to be cut

[DaBees-Knees]

http://news.bbc.co.uk/1/hi/business/10341663.stm

The three big landline telephone firms - BT, TalkTalk and Virgin - have agreed to make big cuts to the cost of ending their deals early.

The telecoms regulator, Ofcom, has told them to cut their "early termination" charges by up to 85%.

The one-off fees levied on their customers will fall from as much as £33 to as little as £2.

The firms agreed to the change despite arguing that their fees were not unfair.

All other landline phone suppliers have been told to follow the example of the big three or face formal action by Ofcom.

Ofcom 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."

Cost of supply

The regulator said it had been looking at the issue for 18 months.

The scale of these reductions shows how badly landline providers have been overcharging people up until now

People who ended their deals early have to pay a charge supposedly based on the money they would have to pay under the remaining term of their contract.

But Ofcom argued that the firms were failing to take into account the fact they they no longer had to bear the cost of supplying their phone service to those households.

BT denied this was the case.

"If a customer leaves within the minimum contract period that they signed up to, they are charged the amount we expected to receive from them, less the costs we save as a result of them leaving early, as this is what we are legally entitled to," said a BT spokesman. "However after discussions with Ofcom, we have agreed to reduce these charges for landline (or landline plus broadband) services over the coming months, to help them reach an industry-wide agreement on charges. "

Hefty cuts

TalkTalk has already cut its early termination fees from between £33.48 and £14.44 to between £8 and £3.

BT's fees will come down in October, from between £8 and £7.50 to between £5 and £2.

Virgin will also cut its fees in October, from between £29.99 and £11.99 to between £8.35 and £4.

Editorial note - I recently read the small print on a 2 year contract from a UK telecom provider called XLN. The early termination fee was £200!

The government's recently established consumer watchdog, Consumer Focus, said the cheaper charges were good news.

"The scale of these reductions shows how badly landline providers have been overcharging people up until now," it said.

"It is still best if people avoid early termination fees altogether so phone companies must make sure consumers know exactly what they are signing up for in the first place."

At long last one of the many rip offs is being brought to task. 

[GhostShip]

The real rip off is something they haven't even looked at yet, the land-line costs when all a customer really wants is broadband, many people are paying excessive charges for a service they are never going to use simply to get on the net, if they can offer a service in Australia that does away with the land-line related costs why cant the same happen in the UK ?

No need to wait up on an answer