Ofcom to address mid-contract price hikes

Debating whether to allow consumers to exit without penalty
Darren Allan

January 3, 2013
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Ofcom has opened up a consultation to address the issue of how consumers can be protected from a mid-contract price increase.

When you buy a mobile phone, or sign up for a fixed term landline or broadband contract, the terms and conditions of the contract need to be read carefully, as some providers can leave open the potential for a rise in your monthly fee – with no possible redress, as you’ve signed up to this.

Many consumers aren’t aware of this, not having checked the terms and conditions, and are shocked when prices are upped. Ofcom received 1,644 complaints over nine months regarding price hikes.

So the consultation is about how best to defend consumers from these price hikes, and Ofcom favours a system whereby the consumer will be allowed to leave the contract without penalty after a price increase – should they be unhappy with the level of the increase.

There are other possibilities on the table – such as making it so consumers have to actively opt-in to a variable price contract – but Ofcom isn’t convinced that alternative measures go far enough.

The watchdog also noted that providers need to be clearer about potential price rises rather than hiding clauses away in terms.

Ofcom’s consultation closes on March 14th, with a decision expected to be made come June.






 

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