We’re constantly being told that to get the best deals on everything from broadband to energy and insurance we should switch, switch, switch. But it’s not always as simple as we’re led to believe.
Your letters tell of companies taking money long after contracts should have been cancelled, outrageous estimated energy bills, debt collectors chasing money you didn’t even know you owed, and conflicting information on vital details such as whether you can take your landline number if you change phone company.
Guidelines seem to vary depending on which utility or product you are moving. If you cancel your direct debit, do you have to tell the firm you are leaving? How long should it take? And what are your cancellation rights?
More importantly, whom do you contact if something goes wrong (other than me, of course!).
Switch on: Guidelines seem to vary depending on which utility or product you are moving
Occasional mistakes will happen. But it is the manner in which firms respond that speaks volumes.
For many of us, the first stop when switching is an internet comparison site. But even these supposed aids can contain pitfalls for the unwary.
Some guide you towards deals which provide them with a kick-back payment if you switch.
For example, there may be a tick-box option along the lines of: ‘Only show the products where we can help you switch.’
You must answer ‘no’ to this if you want to be shown all the options.
Also, be wary of a seemingly generous offer to have the top companies call you back. Once they have your number you may never hear the last of them.
If you don’t have access to the internet, or aren’t comfortable using it, then some comparison firms also provide help over the phone — but make sure you stress that you want them to look at the whole market, not just firms that pay them.
This is Money has carefully selected comparison partners that we believe can offer you the best service and round-ups of the best deals. These quick links will take you to them
Examples of comparison sites include Which? Switch (0800 410 1149), uSwitch (0800 6888 557), MoneySuperMarket, CompareTheMarket and GoCompare.
Now let’s look at the specific stumbling blocks you might hit and how to resolve them . . .
DON’T LOSE YOUR INTERNET ACCESS
I receive more complaints about phone, broadband and TV switches that have gone wrong than any other form of utility move.
Many stem from customers being given contradictory information by firms they are leaving and joining.
Complaints include customers being left without a phone or broadband, losing their number or still being charged for a service they thought they had cancelled.
First, the key question: can you keep your phone number? The answer, says regulator Ofcom, is yes, so long as you are not moving home to a new exchange area.
Your new provider should pick up the line without you needing to tell your existing phone company.
There can be one problem with this. The old operator can usually charge you a 30-day notice period, so you end up paying twice. On the other hand, if you give notice to your existing provider they may then drop the line before the new firm picks it up and you can lose your number.
Regulator Ofcom is gathering information onphone, broadband and TV switches
This may be why some people choose to take a new number when they switch company. But if you do this then you must give notice to your old firm otherwise they will continue to charge you.
Things can get even more complicated when switching to, or from, a cable firm such as Virgin that also provides TV and broadband.
Regulator Ofcom is gathering information on barriers to switching, which include providers imposing different contract lengths on the phone, broadband or TV elements — making it very difficult to co-ordinate a switch.
Ofcom told me: ‘We are considering whether information about exit terms or contract lengths currently provided to consumers at the start of a contract is sufficiently clear. An alternative solution could be to require that all elements of a bundle have the same contract end-date.’
As things stand, it is vital to make sure you tell your existing provider you wish to cancel your TV when you move your phone and broadband. Otherwise you may find yourself still paying for TV even after other services have moved.
On Monday, Ofcom closed a two-year probe into Sky. No enforcement action resulted but the firm has made it easier to cancel.
Sky is also providing refunds to customers who made a cancellation request by letter or email between May 1 and July 31, 2015 and did not have the correct notice period applied to their request.
Customers who made a written cancellation request and found the notice period was not backdated to when Sky received the letter or email should call 0800 759 1703.
Customers can now cancel Sky by using Live Chat online, phoning 03300 413 018, emailing firstname.lastname@example.org or writing to Sky Subscribers Services Ltd, PO Box 43, Livingston, West Lothian, EH54 7DD.
Another issue cropping up regularly is Virgin Media enforcing cancellation charges on customers who move to areas it does not supply. This prompted Ofcom to open a formal investigation into the fairness of Virgin’s early termination charges, including for those who move house.
THIS IS MONEY’S FIVE OF THE BEST BROADBAND DEALS
A Virgin Media spokesman says: ‘We urge customers to consider the length of contracts before entering into them. For customers who feel they need more flexibility we have 30-day rolling contracts.’
Frustrations with switching have led some to cancel direct debits. This is never wise as it can lead to debt collection letters and might affect your credit score.
In addition, leaving the direct debit open for a couple of months after cancelling allows the company to collect any money you owe and pay back any it owes to you. This advice goes for all services and not just phone and broadband.
If there is a problem with the direct debit that the firm will not resolve, ask your bank to intervene. Under the Direct Debit Guarantee scheme it is responsible for resolving payments taken incorrectly. If you change your mind about a contract that you agreed to by phone or internet you have 14 days to cancel. If you signed up in the shop then this does not apply.
However, if you have been promised faster broadband than is delivered, and they don’t resolve the situation, then it may be that they are in breach of contract, which would allow penalty-free cancellation.
Independent arbitrators are Ombudsman Services or Cisas (details are in the next section).
To take your number with you when switching phone dealds you will need to ask for a PAC code to give to your new firm and it’ll make the switch
HOLD ONTO YOUR MOBILE NUMBER
Mobile phone operators have a simple device to keep us hooked — the upgrade.
But do you really need a new phone? Most do the basics we all want: make calls, send messages and search the internet.
However, with a new phone on contract, part of the monthly bill is paying for the handset.
So you could let your contract expire and save a small fortune by switching to a SIM-only deal, where you keep your old phone and simply pay for the data, texts and minutes you use.
Quick money-saver: Find the best mobile deals
You should tell your existing service provider that you want to end the contract, or it’ll keep charging.
To take your number you will need to ask for a PAC code to give to your new firm and it’ll make the switch.
If you decide not to use the PAC code and instead take a new number, you must contact your old provider again to tell them you won’t be using it and still want to cancel.
I’ve been contacted by people who have taken a new SIM or phone with a new contract and are shocked to discover they are still being charged for the old one because their PAC code was not used.
If you change your mind about switching you have a 14-day cooling off period if you took the new contract by phone or internet. But this right does not apply if you signed up in person, such as in a shop.
If something does go wrong and the firm won’t resolve it to your satisfaction, there are two arbitrators.
Many of the big mobile operators, including EE, Three and Vodafone, use Ombudsman Services on 0330 440 1614 (ombudsman-services.org). However, around 200 communications companies, including Virgin Mobile and Talk UK, use Cisas — 020 7520 3827 (cisas.org.uk).
TAKE AN ENERGY METER READING
The most common complaints are that providers take too long to switch, attempt to prevent switches and hit you with double charges.
Extra Energy has been the focus of many complaints to Money Mail and, along with Npower and ScottishPower, ranked poorest in a Which? satisfaction survey.
The top-ranked firms were Ovo Energy, PFP Energy and Ebico.
The rules for switching are fairly straightforward. You can leave your existing contract up to six weeks before it expires without penalty.
Call your chosen firm to set up your new contract or go via a comparison firm. Once you’ve agreed, the switch should take place after around 17 days. This allows for a 14-day cooling-off period when you can change your mind. The new provider should write to you telling you the day of the switch.
You don’t have to tell your existing provider that you are leaving. However, you should take a meter reading on the switch day and send it to both your new and old providers. If you don’t do this you face the risk of getting an estimated reading.
If something goes wrong contact the energy firm. If they don’t resolve it, contact Ombudsman Services.
Essential: You must legally have car insurance if your vehicle is on the road
FORGET CAR COVER REFUND
If you pay by direct debit, tell your existing insurer you are leaving.
You must legally have car insurance if your vehicle is on the road.
If you pay by direct debit your insurer will automatically renew your cover unless you say not to.
You do have 14 days to cancel a new contract but will be charged pro rata for used insurance and may also face a cancellation charge, but these must be reasonable.
And if you switch half-way through the year, don’t expect to get a full six months’ premiums refunded.
As far as the insurer is concerned it has provided you with full cover and would have paid out the cost if your car had been written off.
If you have a dispute it won’t solve, go to the Financial Ombudsman Service (FOS) on 0800 023 4567 (financial-ombudsman.org.uk)
MAKE BANKS PAY FOR MISTAKES
Banks are constantly luring us with offers of around £100 to encourage us to switch. But the real reason for switching should be because of a better package.
You don’t have to tell your bank you are moving, but it can help.
The new bank should switch everything, including standing orders, direct debits and incoming payments such as your salary or pensions. It should also foot the bill for any mistakes that might occur with these payments during the switch.
The process should take no more than seven days. If something goes wrong, your new bank should sort it out. Under the direct debit guarantee the bank must sort out any problems with your direct debits — staff shouldn’t ask you to resolve them.
Tell them you want to have your complaint registered so they take you seriously. If a bank won’t resolve a dispute, go the FOS.
TOP CURRENT ACCOUNT DEALS WORTH JUMPING SHIP FOR
Top offers for free money and incentives
First Direct pays £100 to new customers who switch to its First Account. The account comes with a £250 fee-free overdraft buffer.
M&S Bank’s current account has a £185 gift card offer if you switch and stay for a year. You also get 1 point for every £1 spent on your M&S debit card in store with the M&S Loyalty Scheme.
Barclays Blue Rewards pays up to £7 per month into your account for everyday banking tasks, plus customers with other products from the bank such as insurance and a mortgage can boost earnings up to £16 per month.
Halifax pays £75 to sign up and a £3 monthly reward on its Reward Account, it requires a £750 minimum deposit.
Co-operative Bank offers up to £5.50 a month in Everyday Rewards if you fulfill certain criteria, plus it has recently introduced a £150 switching incentive that promises £125 to you plus a £25 donation on your behalf to a homeless young people’s charity.
Best interest-paying accounts
The best for you will depend on the level of your balance and your monthly deposit amount.
While Santander’s 123 Account may not be as lucrative as it used to be, it is still the best option out there for those with a large balance. It pays 1.5 per cent interest on amounts between £1,000 and £20,000, but it is still a top deal for anyone with a large balance. It also pays up to 3 per cent tiered cashback on household bills, however it has a monthly charge of £5.
Nationwide’s fee-free option, the FlexDirect account pays 5 per cent interest on balances up to £2,500 – but this is only for the first year. You must pay in a minimum monthly deposit of £1,000.
TSB’s Classic Plus account offers 3 per cent interest on the first £1,500 in your account, plus you get up to £10 each month if you maintain two direct debits from the account and make at least 20 debit card payments a month (until June 2018).