The Office of the Telecommunications Authority has issued a new code of practice to provide the industry with guidelines on the drawing up of service contracts.

The code will take effect immediately, replacing the two similar codes issued in 2004.

Key issues

Customers can cancel the contract without penalty within a seven-day cool-off period under the new code, subject to certain exceptions. They can terminate if there is any variation of contract terms resulting in material change of service quality or price.

Arrangements for termination of contract must be easy and convenient, while renewals cannot be automatic without customer consent.

A printed copy of the contract must be provided within a reasonable time after an oral agreement, and arrangements for moving premises must not incur more than incidental costs. Arrangements for return of customer equipment must be reasonable.

Voluntary basis

The code is voluntary in nature and service providers are urged to pledge their compliance to it then report on their compliance status bi-annually or annually.

Should their report be found to be inaccurate or misleading, the office can investigate the case.

It will closely monitor the effectiveness of the code. If the number of complaints on contractual disputes remains high it will consider whether more stringent measures should be adopted.

Resolution scheme

A pilot alternative dispute resolution scheme has been launched since September 2008. Selected cases of contractual disputes which cannot be resolved between the service providers and the customers are referred to independent professionals for adjudication on a voluntary basis.

The office will review the pilot scheme soon to see whether it should implement such a scheme long term.