Customers will be able to leave their contracts early if an operator introduces a mid-contract price increase, under new proposals from Ofcom.
The regulator launched a consultation this morning (Thursday) into mid-contract price rises. Mobile consumers have hit out at the increases, which have been imposed during the past year by all of the UK's operators. However, telecoms companies have defended the price rises, arguing they are in line with inflation and amid increasing costs.
Under the current rules, consumers can only exit a contract without penalty if the operator agrees it would cause 'material detriment' to them. Ofcom is proposing changing the rules so a consumer can leave a contract without having to pay any additional costs if an operator increases its prices. Ofcom is also proposing operators, along with broadband and landline providers, be 'clear and upfront' about the potential for price increases.
Other options under consideration are whether consumer harm could be dealt with by tackling what the regulator sees as the 'current lack of transparency' around potential price inreases. Consumers could also choose to 'opt-in' to any variable price contract. The fourth option is that Ofcom could maintain the status quo.
Claudio Pollack, Ofcom’s consumer group director, said: 'Many consumers have complained to us that they are not made aware of the potential for price rises in what they believe to be fixed contracts. 'Ofcom is consulting on rules that we propose would give consumers a fair deal in relation to mid-contract price rises.'
Ofcom is asking for views on the four options by 14 March 2013 and a decision will be made by June. The consultation follows a review by Ofcom of 1,644 consumer complaints about changes made to terms and conditions between September 2011 and May 2012.
Author: Graeme Neill