Ofcom ruling on mid-contract price rises comes into effect tomorrow

Ofcom ruling on mid-contract price rises comes into effect tomorrow

Ofcom's proposals to protect consumers against unexpected mid-contract price rises will come into effect tomorrow (23 January).

The regulator published the ruling last October, which stated that customers should be allowed to walk away from mobile, landline and broadband contracts for nothing if the price offered at point of sale unexpectedly rises. The ruling was the result of an Ofcom review into the fairness of contract price terms, and sets out the expectations that if an operator wishes to raise its price it should give the customer one months notice and the chance to walk away from it for free. Changes to contract terms should be communicated clearly and transparently.

Three reacted positively when the ruling was initially announced in October, which remains the operator's stance. A Three spokesperson told Mobile: 'We back it. It brings consumers clarity around bills and encourages fairer pricing and competition.'

A Vodafone spokesperson said: 'We will respect Ofcom’s guidance on mid-contract price rises. We will continue to notify customers of increases to out-of-bundle call prices a month in advance, with significant variations also potentially allowing a customer to leave their agreement.'

When the announcement was made in October EE and O2 said they were considering the findings of the document.

An O2 spokesperson told Mobile: 'Ofcom's Updated Guidance clarifies that consumers will be free to enter a contract which includes a price change each year in line with a measure of inflation like RPI - provided the relevant price term is clear and prominent so that the customer clearly agrees to this at the outset. Where this is the case a customer will not be able to end the contract when a price change is applied. Inflation has an impact on our costs and this clarification will help us to continue to invest in our network and the services that matter to our customers while still offering great value for money.'

Telecoms expert at uSwitch, Ernest Doku, said: 'Mobile customers will be breathing the biggest sighs of relief as their contracts tend to be the longest. Hopefully it will make providers think twice about increasing prices - they won’t want to lose customers two months into a 24-month contract. But, even if this move doesn’t stop prices going up, at least it gives consumers some power back. 

'Questions still remain over how networks and providers will respond. It’s our hope that they will not increase prices to compensate. There could also be repercussions for mobile customers who got a ‘free’ handset with their deal - will they have to return it or buy it outright if they leave, or will we see the end of free devices?'

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