From 1 October 2018, mobile phone providers will be obliged to offer mobile bill limits to all customers.
Section 124S of the Communications Act 2003, which comes into force on 1 October 2018, requires providers of mobile phone services to offer customers the ability to cap the cost of their bill and to notify customers when the limit is about to be reached. This will be available to all those taking out a mobile contract on or after 1 October 2018.
If a service continues to be provided without this consent, the provider is prohibited from billing the customer for any charges for the service after the limit is reached.
Ofcom hopes that providers will voluntarily offer bill limits to those in existing contracts, but this will not be a legal requirement.
The legislation defines a ‘mobile phone service’ as “an electronic communications service which is provided wholly or mainly so as to be available to members of the public for the purpose of communicating with others, or accessing data, by mobile phone”.
Some customers will have multiple accounts or phones linked to a single account (e.g. business customers or parents who are also responsible for their child’s account) and these customers may have differing needs. With this in mind, it may be appropriate for providers to take a flexible approach to accommodate the customer’s preference as to how a bill limit should apply. For example, a business customer may want a bill limit to apply to a specific account or, alternatively, apply across all accounts.
Types of Bill Limits and Reasonable Notice
The legislation that will be in place from 1 October 2018 states that the customer must be allowed to specify a limit “on reasonable notice at any time”, meaning that it is open ended in terms of the amount of notice and the level of bill limit that a customer can request. Because of this, providers should consider carefully the needs of the customer requesting the limit, minimising the delay between a customer’s request and the bill limit taking effect. Ofcom would not expect a reasonable notice period to be longer than a single billing period.
Some providers may be considering the possibility of offering customers a range of pre-set bill limits to choose from instead of allowing customers to decide on a limit of their choosing. This is currently not covered by the legislation which refers to the customer having an opportunity to specify a billing limit. However, from a practical perspective, Ofcom recognise this approach would assist providers in managing the billing limits across their entire customer base. Nevertheless, it remains mandatory for providers to ensure they comply with the new regulation.
Providers should always therefore consider whether the choice of options offered is appropriate and fair from the customer’s perspective. In Ofcom’s view this would include ensuring that:
- customers can limit costs to their core subscription price for each billing period; and
- that they are offered a wide range of reasonable limits which would suit the needs of different customers (i.e. appropriate high and low limits with no substantial increase between any two bill limits within that range).
- providers must give customers written confirmation in the circumstances set out in s124S(7), of:
- any decision by a customer to apply a bill limit or to subsequently amend or remove a bill limit; and
- any agreement to exceed a bill limit after being notified that they are nearing or have reached that bill limit.
Ofcom expects the method of communication to reflect the contact preferences of the customer, e.g. text message, letter or email.
Bill Limits When Roaming
From 1 October 2018, providers will need to be clear and transparent in detailing when and how bill limits will apply to customers when using their mobile services abroad.
Because there is no specific exclusion within the legislation, any bill limit will apply to mobile phone services used while a customer is roaming oversees if this is included in their contract. Ofcom consider that the mobile bill limits obligation in s124S and the data limit requirements in the Roaming Regulations will complement each other to protect customers from bill shock. Ofcom will expect providers to look at various roaming scenarios to ensure that they both meet new and existing legal requirements from the date of implementation.
An area of concern that providers have highlighted is roaming services in some countries outside of the European Economic Area where, for technical reasons, there is a delay in the provider receiving usage data. This, in turn, may prevent providers alerting customers that their limit may soon be or has been reached. For this reason legislation appears to anticipate that it may not always be possible to notify customers immediately; s124S(4) states that the provider must notify the customer “so far as practicable…in reasonable time if a limit is likely to be reached” and “as soon as practicable if a limit is reached”.
Where there is a delay Ofcom consider it reasonable for providers to notify customers as soon as practicable after that provider receives the information. Ofcom do note that providers cannot charge customers if a bill limit is exceeded under these circumstances without first notifying them and confirming in writing the customer’s consent to exceed the limit (s124S(4), s124S(5) and s124S(7)). Therefore, any costs caused by delay must be borne by the provider and not the customer.
How We Can Help
Union Street is committed to assisting our clients with managing and complying with this regulation. Our development team are working hard on new functionality that will assist our clients both with monitoring customers that are approaching their limit and with billing customers that have gone over their limit.
Union Street has a proven track record of responding promptly and effectively to regulatory change. Most recently this has been demonstrated by our preparations for the EU’s introduction of the GDPR, HMRC’s introduction of reverse VAT on the wholesale of communication services and Ofcom’s changes to non geographic call services. As with the aforementioned regulatory changes, our preparations for the introduction of mobile bill limits will be thorough.
We will continue to monitor events until implementation comes into force on 1 October 2018 and will provide an update should any amends to the legislation occur.