It's bad but sadly not surprising to hear that when UK consumers change their mobile phone, fixed line telephone or broadband or even pay TV (eg cable TV and presumably satellite TV) service, the comms service provider doesn't always repay the customer for any credit amount due - eg advance line rental payments, or promotional credits.
In fact the total unclaimed money owed to UK consumers was at least £10 million over the last 2 years, according to UK comms regulator Ofcom.
All this is because you can get stung for two lots of fees (from old and new provider) at once, during the "overlap" period when your contract with your new provider has started but the one with the old provider is still within its termination period, usually 1 month.
An example may help. Say you pay BadProvider £30 in advance monthly on the 1st of the month for use of their service during that month. If you terminate with BadProvider on the 2nd of the month and start using ShinyNewProvider's service, you're obviously not using BadProvider's service after the 1st, but you've already paid BadProvider for it in advance.
So from the 2nd to the end of the first month you move to ShinyNewProvider, you're paying BadProvider for rental for the 2nd to the end of the month (even though you've stopped using it), and you're paying ShinyNewProvider rental for their service for the same period too.
You're paying twice over, unless BadProvider refunds you for the advance payment you made on the 1st, for the period from the 2nd to the end of the month ie 29/30 (assuming 30 day month) of the amount you paid on the 1st of that last month, or £29 in this case - which can be a lot when you add up the customers who don't get a refund!
Obviously the amount of credit due will be less if you terminated later in the month, etc, and some people may actually owe money to BadProvider at the end of the contract, depending on their usage, but this is just to illustrate with a concrete example.
(I'm ignoring any possible twists from the monthly payment date being on a different date from the "contract month" that the payment is for!)
After Ofcom's intervention, the good news is that they've produced a guide to help you claim your outstanding credit when you move to another communications service provider.
The guide has a handy table showing some big providers and what you need to do. Just to summarise (please check the guide for full details), the current position on outstanding credits is:
|BT||Automatic refund of any credit, whatever the amount.|
|O2||Automatically credits amounts over £20; you have to ask for it if less.|
|Automatic refund of credit, whatever the amount.|
TalkTalk (including AOL and Tiscali)
You have to contact them directly to arrange a refund, but they should now be giving you "improved information" about your outstanding credits.
|T-Mobile||Will now automatically refund all outstanding credit. This suggests they didn't use to!|
|Vodafone||Automatic refund of any credits "for all customers who pay by direct debit" only. If you paid Voda by another method, you won't get a refund unless you specifically request it from them.|
|Virgin Media |
|The press release contradicts the guide so I'm going by the guide. I wish Ofcom were clearer about this, it's not going to help consumer confusion.|
Virgin Media - automatic refund for amounts over £1. It doesn't seem to matter when you terminate the contract.
Virgin Mobile - for amounts over £1:
- if you terminate before 28 days, automatic refund
- if you terminate after 28 days, you have to request a refund (but from December 2010 the refund will be automatic).
I guess you need to contact Virgin Mobile to get a refund of any credit under £1 - the paper doesn't say.
The bad news? There isn't mention of lots of other providers include broadband internet providers.
"Ofcom thinks that industry best practice should mean that all providers refund customers the outstanding credit they are owed automatically, and without any further action needed by the consumer."
Well frankly that should be legally compulsory for all providers, not just "best practice".
More help on termination process?
To help customers with switching providers another area, Ofcom should look at and maybe provide a guide on the termination / cancellation process.
Asking for your MAC or PAC number does NOT always automatically terminate your contract (broadband internet and mobile, respectively).
If they are given a MAC or PAC number by your new provider some providers seem to take that as notice of termination, but others don't, and may keep on charging or debiting you unless you actually contact them as well to say you're ending the contract.
I repeat, asking for a MAC or PAC isn't enough. You need to check with your provider as to their termination or cancellation procedure and at the right time tell them officially that you're cancelling their service, and (if they're not listed in the table above) also find out what is their procedure for reimbursing any credits to you and follow it.
And you might also try (if possible) to time when you give them formal notice of termination such that you minimise the period of "advance rental" anyway.