Barclay Communications is appealing to Ofcom to change the rules that allow other telecommunication firms to auto renew businesses' landline contracts for up to five years.
The Belfast-based business says these current regulations force many businesses in Northern Ireland to overspend millions per year - around £22.5m in the last five years.
This is despite regulatory bodies informing telecoms firms that they must notify clients of an impending renewal in advance and in a timely manner.
'Auto-rolling' as it is termed, is when telecoms providers enter into a contract with their client for a fixed period.
Often concealed within the small print of contracts’ terms and conditions, the client must give anything from 30 to 90 days-notice if they want to end, alter or review their contract arrangements.
If the customer is unaware of the procedures and fails to give such notice, they are automatically rolled into an extended contract, which could be for another 60 months, depending on the supplier.
The below contract clause, is by way of an example:
7.TERMINATION OF SERVICES
7.1 At the end of the Contract Term the Agreement will automatically continue for successive periods equal in length to the Contract Term (each such period a “Further Contract Term”).
7.2 The Customer may terminate this Agreement at any time provided that: 7.2.1 the Customer must give 30 days’ written notice.
Britt Megahey, Founder and Managing Director of Barclay Communications, said its ‘Protect UK Businesses: Hang up on Auto-Rolling Contracts’ campaign will highlight the issue which many businesses may not be aware of.
He is encouraging businesses to lend their support by signing a petition to ban the restrictive practice.
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Mr Megahey said: “Currently, the auto-rolling of fixed line or landline contracts could be potentially costing businesses in Northern Ireland up to £5m in overspend each year. Auto-rolling is exploitative and a very real concern.
“Right now, clients feel there is no way to get out of this contract and no way to appeal the renewal. As a result, there are a lot of unhappy customers. Though it’s not just NI businesses that are being affected by the issue, it’s a UK-wide problem.
“We have experienced savings of over 50% for many customers and discovered that the majority have not reviewed their rates in over 10 years. Indeed, some companies were not even aware that a number of the services they were paying for were not being used. This for me calls for a change.”
“We are encouraging businesses to stand with us and make a difference by signing our online petition and by sharing their experience of auto-rolling.
"We need this information to showcase the severity of the problem across the business community. We will present all information to the industry regulator, The Office of Communications (Ofcom) to encourage change in these regulations.
“We are positive that our campaign can make a real difference in line with our work with Ofcom, which has shown an appetite for change on auto-rolling by implementing a ban on the practice eight years ago for smaller businesses. Now it is time to protect the larger organisations who are falling victim to the unjust process.”
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Since initiating this campaign, Barclay Communications has received many calls and emails from unhappy business owners voicing their frustrations, including Declan Molloy from Molloy Fuels.
He commented: “It was never made clear to me, nor was it ever even discussed when my contract was coming close to its end and I was inviting offers in. Our system was dated and costs in the market were lower – so you can understand my disappointment to have been entered into this against my will.”
Stephen Elliott from ESL Engineering added: “My current supplier has rolled me into a 24 month contract as I had missed the ‘correct notification period’ by a matter of five or six days out of 30.
"When I expressed my disappointment to my service provider, the clause was pointed out on our terms and conditions and I was informed that it was easy to negate this obligation if I signed up for a new deal with them. I had suggested that I’d be happy to consider them on fair terms alongside alternatives but couldn’t accept a new deal under force.
“I understand there is basic protection for companies with less than 10 employees but nothing for SMEs. We are a family run manufacturer with 28 employees and don’t have dedicated departments to manage basic utilities.
"I was shocked that any company can legally get away with this practice and equally that they should want to. I have bluntly stated that this is the last business they will see from us.”
If you would like to sign the ‘Protect UK Businesses: Hang up on Auto-Rolling Contracts’ petition or share your business experience of auto-rolling click on this link.
