Walk away from phone contracts if companies change the terms

Monday 07 April 2014

Islanders will be able to get out of fixed-term phone deals if the providers change terms during the life of the contract.

The Channel Islands Competition and Regulatory Authorities (CICRA) has issued instructions to phone companies, saying that if the terms of the deals change, customers should be able to back out.

CICRA interim chief executive, Michael Byrne, said: “There are weaknesses in the current arrangements.  Local operators’ decisions to vary a product offering during a fixed-term period, without recourse, negatively impacts on those consumers.

“For instance, if the amount of data included free in a mobile contract is reduced, during the fixed term, the end result is customers have to pay more for what was originally agreed. We are proposing to modify the licences of JT, Sure Jersey, Jersey Airtel and Newtel to reflect a more transparent and equitable method for variations."

In the UK, Ofcom has been investigating the same issue. It published its findings on 23 October, confirming that UK consumers and small businesses should be allowed to exit their landline, broadband or mobile contract without penalty if their provider increased the cost of their monthly deal.

“The same options should also be available to consumers and small businesses in the Channel Islands,” Mr Byrne said.

CICRA’s proposal provides for a new licence condition that directs the operators to give consumers not less than two calendar months written notice of any increases to the unit price of services and, in turn, gives the customer the right to terminate the contract without penalty if the proposed variations are not acceptable to the customer

“We have also included a direction in the new licence condition that, at the same time as giving notice of the change, operators must inform consumers of the right to terminate,” Mr Byrne said.

The Initial Notice and the Draft Decision can be viewed at www.cicra.je or www.cicra.gg