Back in 2011, Ofcom, the communications regulator in the UK amended their regulations and prohibited Automatic Renewable Contracts also referred to as rollover contracts or rollovers, to residential customers and small businesses with no more than ten employees in the fixed voice and broadband sectors. Whilst this was great news for the small business, it still meant that larger businesses are at risk of being tied into long contracts for much longer than they initially thought, with the terms often hidden within service agreements.
With Automatic Renewable Contracts, the service and the payments for it, automatically continue until the customer notifies the provider that they do not wish to continue with the contract. These types of contracts can be difficult to identify, and difficult to get out of. Termination of a service contract during a renewed term can be very costly.
We recently had a customer who wanted to switch providers to us but after contacting their current provider were informed that they were tied into on an annual rolling contract until 2019! To make things worse, when they received their contract terms, they discovered that the only way they can cancel after the initial contract period had ended, was in a 30-day window in time between, 120 days and 90 days before the annual renewal date.
Whilst these terms might seem extreme, they are in fact common with many providers. In fact, we are only one of a few companies that once the initial contract term is over, we only ask you give us 30 days’ notice to switch away.
The obvious way to avoid ‘Automatic Renewable Contracts’ is to avoid entering into them. However, sometimes this can be tricky as the service being offered is required by your business. It goes without saying that you should read every new telecom contract carefully and completely before you sign on the dotted line.
Never be afraid to ask questions and to ask your provider to go through the terms and conditions with you. If you find something in their contract term that you’re not happy with, make sure to address this with them. Never assume that the telecoms contract you have been shown is a set standard agreement. The provider wants your business so there will always be room for some negotiation. Often it is just a case of knowing what to ask for.
Consider things such as:
- Whether it is possible to insert a shorter renewal term into the contract
- Ask for the contract to be amended to a fixed term contract so cannot be automatically renewed.
- Ask for a clause that requires the supplier to provide you with written notification of when the contract is going to end and an exact time period in which you can cancel the contract.
- Make sure you add a reminder into your calendar to look at your contract before the contract period ends.
How can you reduce risk and protect your business?
It’s important to never just assume that what you’ve read in a contract is set in stone, particularly when it comes to cancelling your contract. What you think its saying can sometimes be misleading and it’s easy to get confused by all the jargon. Make sure you know your rights and don’t tick anything until you know exactly what its asking.
If you are not sure when your contract ends or what your cancellation fees are or if any automatic contract roll over exists, we urge you to check this now as opposed to waiting until you are looking to make a change for financial or customer service reasons.
To find out when you can next review your business telecoms costs, please contact us 0800 505 3350. All we need from you is a copy of your current phone bill and we will do the rest. Alternatively visit our Phone System Review page to find out all about managing your telecoms, contracts and technology through us.