The majority of broadband providers offer broadband internet services under long term contracts. In fact, with most providers the minimum length of contract that you can get as a customer is twelve months. This is for a number of reasons, beneficial both to you and to the provider. When you want to sign a longer contract, the internet service provider can run a credit check on you, to see if you're a credit risk. They then deny contracts to credit risks, which saves the company money and in turn allows you to profit from lower prices. It also allows companies to off-set initial fees (such as set up costs, and cost of providing free hardware such as wireless routers) by adding a little to each monthly payment, meaning that you don't need to pay a lot of cash at the start of your contract. But not everyone is able to keep to the terms of your contract.
What Will Happen When I Quit?
The good news is that you can leave your broadband provider whenever you wish. The bad news is that you will almost certainly be required to pay an early termination charge or a contract non completion fee. These fees vary by company and the amount of time left on your contract. New rules set out in 2010 say that by law the contract cancellation fee cannot be more than the total of the remaining monthly payments left on the contract. However, that doesn't mean that your early termination charge is going to be low, in fact they can often be pretty hefty.
Termination Charges By Company...
Even within a company your termination charge can depend on the plan that you have with them. The cancellation charge with BT varies from around £8 to £16 for each month remaining on your contract. Virgin Media charge anywhere between £4 for their simple landline plan to £20 for their XXL broadband plan for each month left on your contract. And Talk Talk charge between £8 and £15 per remaining month. For example, if you have an eighteen month contract for Virgin Media's XXL broadband plan and want to break your contract after twelve months, you'll have six months left on your contract and therefore will pay £120 as your termination fee.
Do I Have to Pay?
If you're choosing to leave the service provider then legally you are required to pay the contract non completion fee. However, there are a few exceptions. Distance selling regulations say that if you buy any goods or services by phone or online you have a seven day cooling off period. Legally you can cancel any contract within that seven day period without paying anything. In a couple of other cases you have unclear legal rights, but may be able to cancel your contract without penalty. One of these cases is if you move house and your current provider can no longer give you service at your new address, in which case they may allow the contract to default and not insist on payment. Secondly, under circumstances called “material detriment” if your provider raises their prices significantly or in any other way changes your package so that you can prove it's of material detriment to you (i.e. you won't be able to pay the new prices, or that different speeds will affect your work performance) you may also be able to cancel without penalty.