Consumer rights when closing a contract and starting a new one

[KG5]

I went to review my broadband package as out of contract and there are much better deals out there. When I queried my package, I was told that if I close my account and then I will not be able to sign up to a new account for another 2-3 months. When I asked why, they told me they did not want to encourage existing customers to access new customer prices.. When I asked for their policy/ contract to state this they told me its not written down. Surely, this cannot be legal? 

[goslow · Accepted solution]

Some have claimed 60 days or even 30 days away from VM before becoming a 'new' customer but that may be down to how keen individual sales agents are to make a deal. 90 days is probably the time most regularly quoted on here from leaving to re-joining as 'new'.

Introductory pricing for new customers is not uncommon. In the insurance world existing customers and new customers should be offered the same pricing and some telecoms providers have voluntarily chosen to do this. VM is not one of them.

I imagine you could sign up again with VM within the 90 days but you may simply not be offered new customer pricing.

[KG5]

Thanks for your response... Surely, this would need to be captured in T&Cs or a contract/policy document? Also, aren't they discriminating against the consumer as once they have left, they should not be able to apply a 'penalty' for leaving them, but should in effect treat them as a new customer?

[goslow]

Other than in topics on here, I can't recall seeing it written down in any VM doc's anywhere. Someone else may know of an 'official' source.

Can't really debate the rights and wrongs of it too much (nor VM's own position).

Those in favour of it argue that it promotes competition, encourages customers to move around to get the best prices and everyone can benefit from it if they choose to be proactive and move supplier.

Those who are against it argue that it penalises 'loyal' customers unfairly.

The alternative to moving is to renegotiate your agreement with VM every 18 months to get the best pricing you can. If VM don't come up with a satisfactory deal then move to another supplier.

It is often reported on here that, having given notice to leave, the best offers come in from VM's 'retentions' department. Unfortunately though there is never any guarantee that such a call will actually come through so it's a game of bluff with the customer actually being willing to walk away if needs be.

[Andrew-G]

There are no specific consumer rights covering this.  Why would there be?  You benefited from a new customer discount when you joined VM, you may have benefited from or been offered some discount to renew when the fixed term expired.  And you'll be benefiting from another company's new customer discount if you take your business elsewhere.  VM's pricing, including their criteria for being a new customer is a commercial decision for the company.  If you or I don't like it, the remedy is to take our business elsewhere.

It is feasible that some feeble minded politician might yet ban this practice ("customer acquisition pricing"), as they have in insurance, but there's no reason to believe that's a good thing in the medium to long term.  As the bankruptcy of the majority of energy suppliers has shown, allowing politicians to meddle in market pricing decisions rarely has a good outcome for consumers.

[KG5]

Let's see where it goes!