Ofcom bans ARCs

Ofcom, the regulator that deals with broadcast, telecoms and radio has published a statement that will stop telecoms and broadband providers from automatically renewing contracts for those services.

Currently automatically renewing contracts (ARCs) come into effect at the end of a minimum contract period (MCP) and will then enter a new MCP automatically unless the customer explicitly terminates the contract. If they miss the termination period they may then may be subject to an early termination charge (ETC).

The regime comes into force in December 2011 for all new telecoms and broadband contracts for new customers and by December 2012 for existing contracts (that may be already ARCs).

This only affects consumer and small business contracts.