Ofcom to cut landline termination fees

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The fee charged by telecoms operators when customers finish contracts early is set to be cut significantly, thanks to a new ruling.

Ofcom has told big providers they will have to reduce the amount they charge for terminating landline phone and broadband contracts by up to 85 per cent or face enforcement action.

“Consumers who end contracts early should never have to pay more than the payments left under the contract,” it said in a statement. “In fact they should often pay less, to reflect the costs providers save because the contract ends early.”

BT, Virgin Media and TalkTalk all claimed to Ofcom the original cost to the consumer was fair. However, after long discussions with the regulator, dating back to early 2009, they have agreed to implement the new charges.

It could cost up to £33.48 for each month left of your contract to cancel it early, but the new ruling has cut this to as little as £2 – full changes in pricing available here.

TalkTalk began the new pricing on 1 June whereas the other two providers will begin in October this year.

Ofcom expects smaller providers to follow suit and start cutting their own termination costs, however it has warned they could also face formal enforcement action if they don’t get in line.

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