Ofcom to address mid-contract price rises
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.