Plans for standard one-week switching across consumer services


Mortgage providers could be required to deliver seven-day switching to customers wanting to move to a better deal, under Government plans to establish a new one-week standard across consumer services.

The measures could be introduced for services from broadband networks to bank accounts, energy and mobile phones.

The plans being considered by ministers would also sweep away obstacles to switching, like charges to unlock phone handsets at the end of a contract, which currently cost users £48 million a year in the UK.

Under proposals in the Digital Economy Bill, ministers are also bringing forward measures designed to make life easier for consumers trying to find the best provider.

The Bill will include provisions to ensure consumers only have to deal with a new provider when switching, rather than having to inform the firm with their existing contract, and will provide automatic compensation for telecoms customers when things go wrong.

Customers will be able to check broadband speeds and network coverage for individual properties, making it simpler to choose the best offer. Information could be displayed in online property search portals, helping house-hunters to take the issue into account.

While the Government recognises that many bank current accounts and mobile phones already deliver switching in seven days or fewer, they want to establish a new consistent norm which can be expected for a range of services. Mortgages are likely to be the most difficult service to include in the new standard, as a change in provider currently takes four to eight weeks.

Ministers cited new evidence suggesting that fewer than 60% of consumers reported being able to switch as quickly as they would like.

They are inviting consumers and industry to offer evidence on how a seven-day standard could be implemented as early as next year.

The consultation will also look at consumer-friendly proposals like requiring providers to make it possible to cancel contracts online if they were entered into online.

Business Secretary Sajid Javid said: "I want to give consumers more power over switching providers for the services they rely on to make sure they are getting the best deals. The Government is committed to creating a system that works for consumers and makes markets more competitive.

"At the moment the time it takes to switch depends on which service you are switching. I want to hear what consumers and businesses think of making switching quicker and more consistent across all markets."

Culture Secretary John Whittingdale said: "We are more reliant on broadband and phone services than ever before. So we want it to be as easy as possible for consumers to spot the best deal for them, and switch providers quickly and easily if they want to.

"The measures we are introducing will help make sure consumers are better informed about the quality of these services and the switching process is much simpler. Also, in those cases when things don't go right, automatic compensation will be paid out."

Alex Neill, director of policy at consumer campaign group Which?, said: "Quicker switching will give people more power to force banks, energy suppliers and telecoms providers to up their game or lose their custom.

"Consumers will also benefit from changes to the telecoms market that mean they do not face charges to unlock their own mobile phones and receive automatic compensation when things go wrong.

"The Government should swiftly implement these plans and introduce a new ombudsman to deal with air and rail passengers' complaints."