Ofcom Plans To Protect Users From Mobile Price Hikes

Telecoms regulator Ofcom has proposed a plan to let users tear up their mobile deals if the operator increases prices during the term of a contract, without any penalty for the customer.

An  ‘exit without penalty’ rule was put out for consultation by Ofcom today, saying it wanted to see operators be more transparent around the potential for price rises and the consumer’s right to cancel the contract.

Ofcom wants fairer deal

Ofcom said a rule in the General Conditions that all operators in the UK must follow would be modified if the consultation process provided enough evidence to warrant a change.

The current rules are somewhat ambiguous. They say a customer can only exit a contract without penalty where the provider agrees the price increase would be likely to cause “material detriment”.

The regulator believes its new proposal would be an “appropriate and necessary measure”. “This ability to avoid the effects of price rises would also mean that the risks of costs increases would lie where we consider most appropriate, with providers,” it wrote in its consultation document.

“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,” said Claudio Pollack, Ofcom’s consumer group director.

“Ofcom is consulting on rules that we propose would give consumers a fair deal in relation to mid-contract price rises.”

The regulator said it had considered a complete ban on mid-contract price rises, but said this would most likely not fall in line with European laws.

Ofcom received 1,644 consumer complaints on changes to terms and conditions between September 2011 and May 2012. Many complainants noted they were not made aware of price hikes, believing they were on fixed contracts.