Phone, broadband and pay-TV providers must alert customers when their current contract is coming to an end from today, under new rules expected to save some households more than £150 a year.
Ofcom says around 20 million customers are already out of contract, including 8.8 million paying for broadband.
It comes as research by consumer champions, Which?, found that two-thirds of current phone and internet packages see customers hit with substantial price hikes when the minimum term on their contract runs out.
In some cases Which? found bills nearly doubled when the promotional period elapsed and reverted to standard fees.
The problem was exacerbated it said because nearly half of customers remain with the same provider for three years or more instead of shopping around or haggling for a better deal.
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Until now, providers were not required to remind their customers when their contract is about to end or warn that bills may go up.
The new measures enforced by Ofcom will mean that home telecom firms must inform their customers between 10 and 40 days before their contract expires, via a text message, email or letter.
The rules apply to mobile phone contracts, internet and satellite or cable television.
The notification must also state any notice period for leaving their provider, the best deals available, and reveal any prices only available to new customers.
Anyone already out of contract must be sent a reminder every year of the best options on offer.
Ofcom says the average broadband customer could save around £100 a year following the change, though some could save £150 or more.
The regulator also estimates that around three million people could upgrade to a faster broadband package and still pay less.
Lindsey Fussell, Ofcom's consumer group director, said: "Millions of people are out of contract right now and paying more than they need to.
"These new rules make it easier to grab a better deal. But you don't need to wait to hear from your provider."
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Previous research by Which? found that broadband customers who switch or haggle with their current provider for a better deal were able to cut an average of £120 a year from their bills.
An analysis by Which? of terms and conditions on current deals from major providers found that customers on a 12-month phone and broadband deal with the Post Office were set for an 89% hike in their monthly bills, from £15.90 to £30, when the minimum term expired.
The next biggest hike was TalkTalk, where the cost of a phone and broadband package went from £21.95 to £41 a month after two years, followed by Virgin Media where bills shot up from £27 to £49 at the end of a 12-month contract.
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Which? said Ofcom must monitor and review the progress of the new regulations to ensure it is effective for consumers.
Natalie Hitchins, Which? head of home products and services, said: “Our research shows that far too many people are paying more than they need to for broadband, so this rule change to ensure people are notified before their contract ends - and potentially before their bills go up - is a positive step."
Andrew Glover, chair of the Internet Service Providers' Association (ISPA), which includes operators such as BT, Sky and Virgin, said the changes should be allowed to "bed in fully" before any further regulation is considered.
He added: "Industry is supportive of end of contract notifications as an additional way to help consumers make an informed choice about their broadband."
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