Ofcom review of Guidance on Additional Charges to bring consumer clarity

In light of the Supreme Court judgment regarding the Bank Charges case, Ofcom are reviewing their Guidance on Additional Charges, however this does not affect consumers’ and service providers’ continuing obligations under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR) which they will ‘continue to enforce as necessary and appropriate, pending publication of any further guidance or other information in this area’.

Some key outcomes of the review are:

  • Proposed issuing of best practice advice to suppliers on making the level of cancellation charges clear to consumers at the point they are considering terminating the contract
  • Improved transparency and marketing information on fixed line non-Direct Debit charges
  • The new BT tariff for low income consumers (BT Basic) should not attract non-Direct Debit charges to benefit many vulnerable consumers on the tariff
  • The intention to support the planned guidance for suppliers by publishing a consumer checklist to alert consumers to key contract criteria they should look for before signing up to a communications service, with the aim of helping commuters make informed choice and to promote competition

The National Consumer Council (NCC) has responded to the Ofcom review of additional charges by agreeing it is helpful and appropriate for Ofcom to complement OFT guidance on the UTCCR and to issue sector specific guidance on their application to consumer contracts for communications services.  They added that ‘encouraging communications providers to be more transparent and upfront about additional charges in their marketing and point of sale information for consumers is a welcome step’.

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