On 1st October 2018, the Digital Economy Act (section 124S of the Communications Act 2003) came into force. The key feature of this legislation is that all mobile phone customers must be given the opportunity (should they want to) to limit their bills for pay monthly, mobile phone services at the point they enter into a contract, or at any time during their contract, by agreeing a spend cap, and customers must be free to specify, amend or remove such spend caps at any time on reasonable notice. This condition is available to both consumers and business customers (but does not include a person who is a customer as a communications provider), who enter into a new contract or a re-sign on or after 1st October 2018.
Spend caps relate to mobile phone services only and do not cover premium calls and calls to non-geographic phone numbers (ie: those numbers which begin with a prefix that isn’t associated with any particular location) and charges associated with the management of the customer’s account.
Where spend caps are agreed, the provider must notify the customer (via SMS/email/letter) if it is getting close to the spend cap limit and must either stop the service so the customer doesn’t exceed the cap amount or agree an extension to the cap to allow the service to continue. Occasionally the data relating to mobile phone charges for overseas roaming (if this is included in the customer’s contract) may be delayed, particularly if the carrier is outside of the European Economic Area. In such cases the assessment of the actual spend against the spend cap will be calculated as soon as is reasonably practicable but may take place after the spend cap has been exceeded. If the cap is exceeded without the customer’s consent, either because the provider failed to stop the service or because the data was delayed, any extra amount over the spend cap, relating to capped services, must be paid for by the provider and cannot be passed into the customer.
This legislation is regulated by OFCOM and non-compliance can result in a fine.
Amanda Williams – Commercial Counsel
