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Ofcom to address mid-contract price rises
Thursday 18 October 2012 17:50:58 by Andrew Ferguson

While some broadband providers are very good at notifying customers who are still within contract about price changes, others try to play fast and loose. Also many consumers miss the clauses that allow for reasonable price rises during the course of a contract. Of course in a perfect world we would all read every contract and more importantly understand the clauses every time we signup for a service or buy something.

Ofcom in response to the volume of consumer complaints and evidence from Which? Appears to be trying to address some of the recurring issues, which is welcome, though one must wonder why so many years after the rise of the more complicated bundles in the UK telecoms market is Ofcom finally acting.

"Our analysis shows that many consumers complained they were not made aware of the potential for price rises in what they believed to be fixed contracts.

Some consumers felt that communications providers should not be able to impose price increases during the life of a contract, and, if they do, the consumer should be able to exit the contract without penalty. Others complained specifically about the amount of the price increase and how it would impact them. "

Ofcom on addressing consumer concern over mid-contract price rises

The trigger perhaps has been the rise of ever more complex contracts, with vouchers to sweeten a deal, promises of free hardware (with an activation fee, and postage costs to pay), the first three months at price A, followed by remaining months at price B and after the end of the minimum term another different price being charged once you shift to a 30 day rolling contract.

Generally most 12, 18 or 24 month contracts carry a term where the consumer can terminate the contract without penalty if a price change occurs that is unfair. In the past some providers have hidden the price rise at the bottom of an email, or neglect to highlight the right for the consumer to break the contract, it also seems some providers try to hide a clause in the contract allowing them to vary the price during the minimum contract period.

Nothing happens overnight in the world of regulation, so do not expect any changes for some months, the news from Ofcom is that a consultation can be expected by the end of 2012, so actual changes be they compulsory or voluntary are probably 9 months away.


Posted by Bob_s2 over 4 years ago
Some of these changes may come undr the Unfair Terms in Contract Directive particularly where the consumer is locked into a long term contract and the ISP imposes changes to the contract and or increase the price above a reasonable amount(Frequently considered to be an increase significantly abvove inflation rate) without letting the consumer terminate the contract without penalty
Posted by tommy45 over 4 years ago
My take on the above,is.. If a customer is prepared to sign up to a contract regardless of it's duration, Then the price at the time of inception(start date)is the price for the whole duration of the agreed contract period, should the ISP or CP not be able to guarantee this, then any price change that is a financial disadvantage to the customer, then this should automatically allow the customer to switch/leave that ISP/CP without any penalty,end of
Posted by Spectre_01 over 4 years ago
agreed with tommy45, if a company can't make a proper judgement over the cost of delivering service then they should suckup the difference.
Posted by herdwick over 4 years ago
Caveat Emptor. A contract with a minimum or fixed duration is not the same thing as one with a fixed price.
Posted by chrysalis over 4 years ago
I think a court would side with the consumer here, and I think ofcom will as well. I cant see how ofcom can back isp's issuing long contracts but then able to bail out without penalty (price increases).
Posted by SYM9 over 4 years ago
It may well all depend on the providers, they may well make the decision to bung a few thousand to political party funds to see OFCOM go away, and under those circumstances, it probably will.
Posted by jacky47 over 4 years ago
It isnt true that nobody said about vodafone, there were hundreds of unhappy costomers, i think they just didnt want to bring it up.
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