The MD of UK ISP Andrews & Arnold (AAISP), Adrian Kennard, has today pointed out another potential issue with Ofcom’s new One Touch Switch (OTS) system for quicker and easier switching between broadband providers, which could conflict with the statutory 14-day cooling-off period.
The Consumer Contracts Regulations 2013 currently require a 14-day cooling-off period, which affords consumers the right to cancel their service contract within that period, although some costs may still apply to doing this (i.e. it’s not to be treated as a free trial).
For example, customers of BT’s broadband service are told: “Once you place your order you can cancel anytime up to 14 days after your service starts, or when you receive your equipment (whichever is later). You need to return any equipment we’ve sent you.” But BT’s terms do caveat that “If we’ve already started providing a service, you’ll have to pay us the full cost of the service you’ve had.”
Similarly, A&A’s terms state: “For services, the cancellation period will expire after 14 days from the day of the conclusion of the contract (i.e. when we accept your order). However, ordering services as soon as possible, or for a date within 14 days of order means your right to cancel will expire once the service is provided within 14 days of order, even if you are not yet using the service provided.”
In addition, section 36 of the act also provides a facility for consumers that do not wish to wait 14 days for a service to be performed. It specifically allows a consumer to make an express request, in a durable medium, for a service to be performed within the 14 days, and waive their right to cancel within 14 days if the service is performed (i.e. you can still cancel if the service is not performed and only pay for the part of the service that has been performed, in proportion).
However, Adrian’s latest blog notes that section 36 is at risk of running into a bit of a conflict with OTS and broadband services more widely, which requires internet providers to action switches within just 1 day “where technically possible“ (instead of 10 days under the old system).
NOTE: The “new initiative by Ofcom” mentioned below is just a reference to OTS.
Adrian Kennard said:
“However, this wording does not fit well with a service such as broadband/internet. The problem is that such a service is installed and then ongoing, possibly even with a minimum term. The supplier has costs for arranging the installation, and may well have commitments with circuit providers for a minimum term.
If a customer cancelled after the installation was complete and the service is working, but within 14 days, the supplier has to charge in proportion. For a 12 month term, that is a fraction of the costs to the supplier. Indeed, with services on 12 month term it is common for a free installation to be offered, which is another cost for the supplier if cancelled within 14 days.
As such broadband service provision invariably has a 14 day cooling off period, denying the consumer the option to have an installation done sooner.
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Until now, for most broadband/internet installations, either a new circuit had to be installed (which takes time), or a migration is done with a carrier such as BT Wholesale. BT Wholesale have, to date, enforced a 14 day delay in migrations. So 14 day cooling off period is effectively enforced.
However, a new initiative by OFCOM has changed things. This takes effect 12th Sep 2024. As a result, BT Wholesale are dropping the 14 day minimum lead time on migrations. OFCOM are trying to encourage switching of broadband to be easy for consumers, indeed, the wording of the OFCOM general conditions means a provider has to provide a service as soon as technically possible if the customer expressly requests it, which may be within that 14 day cooling off period.
The fact OFCOM are, in effect, insisting operators allow customers to request services sooner creates a serious problem for providers. If nothing else, a free installation type service would not be sensible (again, to the detriment of the consumer). Even if a provider chose not to fully adhere to OFCOM GC, and insisting on a 14 day cooling off time, this effectively denies the consumer an option. But the wording of 36(2) of the regulations means an Internet provider will not be willing to offer quicker broadband switches without significant risk.
I stress that a consumer has to make an express request for a faster install, in a durable medium.”
Adrian is currently writing to his MP in the hope of getting the legislation tweaked to better reflect the realities of modern broadband provision and the new migration system. But any such changes will probably have to wait for the government to conduct another major review of such consumer contract protections. But even if such a change was accepted, it could still take several years to run the usual course of debates and implementation.
“We’d love to offer the full range of options, including cheap or free install on a 12-month term, along with service provided even next day when possible. But at this point, such options are a risk for small providers and ultimately will reduce consumer choice,” claimed Adrian.
