Cheaper To Terminate Landline Phone Contracts Early After Ofcom Ruling

Terminating a landline phone contract early will become cheaper Ofcom has announced today. Early termination charges could be reduced by as much as 85 percent.

Ofcom has spent the last 18 months discussing how phone companies can reduce the charges that they levy for the early termination of a landline phone contract. The telecoms regulator has been talking to BT, Talk Talk and Virgin Media to find a solution that saves the consumer money, yet is fair to the phone company when a contract is terminated early by the customer.

Phone companies accept that they save money by not supplying a service when one of their customers terminates their contract early and this saving should be passed to the customer by way of reduced early termination charges.

These savings also apply to consumers who receive broadband services in the same package as their telephone.

BT, TalkTalk and Virgin Media do not believe their early termination charges have been unfair. However, after constructive discussions with Ofcom, they have agreed to significantly reduce those charges for landline (or landline plus broadband) services. In a statement Ofcom said it is pleased they have taken these positive steps in the interests of consumers.

Under this ruling, reductions in early termination charges can be significant. BT was charging an £8 per month penalty for the BT Unlimited Anywhere package prior to this ruling, but will now reduce this to £5 per month.

Savings for Talk Talk Anytime customers would be larger. Currently Talk Talk charge £16.98 per month for early termination, but this will be reduced to £3 per month under the Ofcom constraints. For a contract with six months remaining this would save £83.88 if terminated early by the customer.