Banned: Mobile prices rise surprisingly in the middle of the contract
Mobile, broadband and pay TV companies will no longer be allowed to make surprise price increases midway through a customer’s contract after regulatory restrictions came into force.
In new deals from Friday, before anyone agrees to a contract, providers will have to tell them “in pounds and pence” about any price rises, as well as when they will occur.
It comes after a rise in complaints to Ofcom about large, unexpected price rises during times when energy and other bills soared, meaning customers could not properly plan their budgets.
But Citizens Advice said the move fell short of a blanket ban on rising prices mid-contract.
Many telecommunications companies have already changed contract terms in recent years to include price increases during the contract that were linked to inflation. This was on top of the usual 3.9% standard increase.
“The time it’s taken to get to this point has added billions of dollars to bills at a time when we know so many people are struggling,” said Tom McInnes, policy director at Citizens Advice.
“It is already clear that there will be customers whose bills will not only rise above inflation but potentially be higher than under the previous model”.
Meanwhile, Ofcom’s director of networks and communications, Natalie Black CBE, said that now, “more than ever, families want and need to plan their budget.”
“Our new rules mean there will be no unpleasant surprises, and customers will know through clear labeling how much they will pay and when.”
Ofcom said it was unreasonable to expect customers to adjust to surprise price increases linked to inflation, which measures the rise in prices over time, and “can be incredibly volatile and difficult to predict”.
Providers are now required to display information about the increase “prominently” during sales calls or in stores to draw customers’ attention.
Ofcom began investigating the issue in 2003, and stated in its final report that “unfair” price increases “could reduce consumer engagement, undermine market confidence and undermine competition”. .
It said, by April 2024, almost six in 10 broadband and mobile customers were on contract subject to inflation-linked price rises.
