Phone and broadband mid-contract price surprise rises banned

Mobile phone, pay TV, and broadband companies have been banned from surprise price rises during a contract.

In new deals from 17 January, providers must tell customers about any mid-contract price rises at the point of sale and “in pounds and pence”.

This must be done in a “clear and comprehensible” way, Ofcom has ordered.

Complaints from customers have risen about large, unexpected price rises at a time when other bills had been soaring.

Ofcom said that many telecoms companies had changed contract terms in recent years to include price rises during a contract that were linked to inflation. This was usually on top of a 3.9% standard increase.

That meant customers, when agreeing to a deal, could not budget for unknown price rises in the future.

Cristina Luna-Esteban, Ofcom’s telecoms policy director, said: “People need to have certainty about their monthly outgoings. But that’s impossible if you’re tied into a contract where the price could change based on something as hard to predict as future inflation.

“We’re stepping in on behalf of phone, broadband and pay TV customers to stamp out this practice, so people can be certain of the price they will pay, compare deals more easily and take advantage of the competitive market we have in the UK.”

The move was proposed in December and has been through a consultation process.

Ofcom said, as of April, about six in 10 broadband and mobile customers were on contracts subject to inflation-linked price rises.

Many were unaware of the rates of inflation – which chart the rising cost of living – and so found it difficult to estimate the effect on their payments.

However, some providers were offering fixed-price deals in what the regulator described as a competitive market.

Consumer groups were circumspect about the change in the rules.

Tom MacInnes, from Citizens Advice, criticised Ofcom for the time it had taken to reach the decision. In the meantime, billions of pounds had collectively been added to bills when many people were struggling.

“While we welcome steps to ban inflation-linked hikes, the announcement falls short of a full ban on prices rising mid-contract,” he said.

“Ofcom has also left the door wide open for mobile and broadband providers to sneakily include ‘prices may vary’ small print in their contracts, leaving consumers exposed to wholly unpredictable price rises. That’s why we’ve always been clear that fixed should mean fixed.”