Telcos should be flexible with contract termination to protect customers' interests: IMDA

Most telcos notify customers of the contract end-date in advance.
Most telcos notify customers of the contract end-date in advance.PHOTO: ST FILE

SINGAPORE - The Infocomm Media Development Authority (IMDA) has called on telcos to be more flexible when allowing customers to terminate service contracts that have expired.

Its move on Friday (Sept 11) to protect customers' interests comes after readers earlier wrote in to The Straits Times Forum page complaining about M1's "unfair" business practices in this respect.

M1 had required customers to give notice of termination exactly seven days before their broadband service contracts ended, failing which, the contract would be automatically renewed.

The IMDA noted that most telcos offer their customers the option to terminate their service plans when the minimum contract term expires.

Most telcos also notify customers of the contract end-date in advance, and do not specify a date the notice must be served by.

"We have asked telcos that do not already do so, such as M1, to offer similar flexibility to their customers," said IMDA communications and marketing cluster director Foo Wen Dee.

"IMDA expects telcos to safeguard their customers' interests, and to take their feedback seriously."

The IMDA was responding to two letters published in ST on Aug 27 and Sept 4, in which the writers questioned the practice of requiring customers to give notice of termination for contracts that have run out.

The first letter, from Dr Jeremy Teo, gave details of his experience with M1's seven-day notice of termination policy.


"To make customers call in on an arbitrarily defined date or subject them to penalties or to continue billing is unfair and unethical," Dr Teo wrote.

The second letter, from Mr Cheng Shoong Tat, argued that such practices fly in the face of the basic principles of contract law.

The Consumers Association of Singapore (Case) also weighed in on the matter on Friday, calling M1's termination policy "too onerous" and urging the telco to review its practices.

"It is unfair to require consumers to make the request to terminate the contract only on a specific day, especially for long-term contracts," said Case president and Mountbatten MP Lim Biow Chuan.

Consumers should be allowed to terminate their broadband contracts as long as they give a minimum of seven days' notice, he said.

Mr Lim also noted that notice periods for termination differ among the telcos. For instance, Singtel does not specify a minimum notice period while StarHub requires a notice period of at least one month.

"We advise consumers to scrutinise the terms and conditions, and pay special attention to clauses related to termination," he added.

On Monday, the Competition and Consumer Commission of Singapore issued a set of price transparency guidelines warning against misleading advertising practices such as touting prices that omit mandatory fees.

The guidelines, which take effect on Nov 1, cover four areas: drip pricing, which refers to fees added on to the advertised price during the transaction process; false or misleading price comparisons; fake discounts; and use of the term "free".