Operators 'earning £90m a year from price rises on fixed contracts'

Operators 'earning £90m a year from price rises on fixed contracts'

Consumer campaign group Which? has claimed price increases on fixed contracts could net mobile operators £90m this year.

The charity has launched a new campaign called 'Fixed Means Fixed', which calls for an end to price increases on fixed mobile contracts. It has made a formal complaint to industry regulator Ofcom over the price rises. Research by Which? found 70% of people on contracts did not know companies could increase prices during the length of their contract.

The charity estimated that 10.5 million consumers have been hit by price rises so far this year, spending an extra £34.5m on their contracts. Which? executive director Richard Lloyd said: 'These hidden price rises mean millions of people are forced to pay more than they expected at a time when household budgets are already squeezed. They are then trapped in a contract, unable to switch to a cheaper provider without paying a hefty penalty.'

Which? revealed that Vodafone, T-Mobile, Orange and Three have all increased prices on their contracts during the past year. It said consumers were unable to cancel their contracts without paying a penalty.

Lloyd added: 'Ofcom must intervene now and stamp this out. Consumers must be confident that fixed really does mean fixed.'

An Ofcom spokesperson said: 'We understand why consumers in fixed term contracts are sometimes disappointed to find that the particular contract they have signed up to allows price rises.  While current rules allow for contracts to include price increases in certain circumstances, after receiving consumer complaints on this issue, Ofcom launched a review in January 2012.  The review is examining requirements on Communications Providers relating to consumer contracts, including provisions covering changes to contracts.

'This exercise has identified a number of potential issues with the current regime and the adequacy of the current level of customer protection. We will consider the material provided by Which? alongside this evidence. We will also be meeting Which? to discuss their concerns in more detail before we make any decisions regarding our work under our current review.'

Editor: Graeme Neill

Written by Mobile Today
Mobile Today


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