£millions of outstanding credit unclaimed by consumers

Ofcom today called on consumers to check that they aren’t owed money when they switch their communications services to a new provider.

Ofcom has gathered data that suggests that over the past two years there have been around 2 million consumers who have left their communications provider, without claiming at least £10 million owed to them.

The money owed could be for having paid for line rental in advance or for promotional credits that customers may have been given during their contract. Consumers often don’t know that they are owed money by their landline, mobile, broadband or pay TV provider.

Making it easier for consumers to be refunded

Ofcom has worked with communications providers to encourage them to make changes to their processes and to automatically refund credit to their contract customers.

Initially, of the major providers Ofcom spoke to, only BT, Orange and Post Office automatically refunded outstanding credit to their customers, no matter what amount was owed.

Following discussions:

• T-Mobile has agreed to automatically refund all outstanding credit and Vodafone for all customers who pay by direct debit.
• Virgin Media and Virgin Mobile automatically refunds its customers for amounts over £1 if they terminate their contracts before 28 days, and from December 2010 the process will be automated for all customers (for amounts over £1).
• O2 will automatically credit amounts over £20.
• Customers of Sky, Talk Talk (including AOL and Tiscali) and Three will need to contact them directly to arrange a refund, but our conversations with these providers have led to improved information being given to consumers about their outstanding credits.

Ofcom welcomes this increase in transparency which means that in all cases consumers should be informed by their provider if they have outstanding credit, and what they need to do to reclaim it.

Nevertheless, 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.

Consumer guide

To help consumers claim outstanding credit, Ofcom has published a guide which provides a clear overview of the credit refund processes of the main communications providers. The guide can be found here: http://consumers.ofcom.org.uk/files/2010/10/how-to-claim-credit-refunds.pdf.

Ofcom’s Chief Executive, Ed Richards, said: “Consumers were telling us that they found it difficult to claim unused credit from their providers when they left their contracts. Taken together, people have been millions of pounds out of pocket as a result.

“We hope that automated refund processes, clearer signposting by providers and our new consumer guide should help consumers claim back money that is rightfully theirs.”

ENDS

NOTES FOR EDITORS

1. The credit refund processes outlined apply to contracts only and Pay As You Go services have different refund processes in place. Consumers should contact their mobile provider directly.

2. Estimates of consumers affected and money owed are based on information supplied to Ofcom by providers in 2008/9.

3. Under Section 3 of the Communications Act 2003, Ofcom has a duty to further the interests of citizens in relation to communications matters. Section 26 also allows Ofcom to publish information and advice for consumers about communications matters.