UK telecommunications regulator, Ofcom has sealed a victory for mobile customers regarding contracts and price hikes. The new guidelines, which take effect from tomorrow, will enable customers (consumers and small businesses) who take out new landline, broadband or mobile contracts to terminate immediately without penalty, should the service provider increase the monthly subscription fee.
This move follows an Ofcom review into the fairness of contract price terms, which found that many consumers were caught off-guard by price hikes mid-contract when they were under the impression their subscription was locked at a fixed price. Ofcom states that should a provider wish to increase the monthly subscription fee agreed by the customer at the point of sale, they should be provide at least one month's notice, with the ability for the customer to cancel the contract without penalty.
Not only will customers be protected against sudden price increases, but Ofcom's new guidelines detail that any alterations made to "contract terms, pricing or others, must be communicated clearly and transparently." The industry regulator will monitor providers to see how they implement and adhere to said guidelines. Claudio Pollack, Ofcom’s Consumer Group Director commented on today's announcement:
"We have reached an important milestone in our work to ensure consumers and small businesses have better protection against unexpected price increases. Additionally, our new guide highlights important factors customers might want to consider before entering into a new contract to help them understand exactly what they are signing up to."
Should you wish to find out more information on these changes and added protection, Ofcom has also published advice and information on the factors you may wish to consider before signing up to a new landline, broadband or mobile contract -- particularly useful if you're unsure what this all means. Check out resources available over on the Ofcom website.
This is yet another step in the right direction with it being little under a year ago when Ofcom began tackling free UK numbers.
Have you been affected by unexpected price hikes in the past?
Source: Ofcom, via: Android Central
Reader comments
UK mobile customers will be able to terminate contracts mid-flight if met with price hikes
Wish our regulators in the US cared to look out for consumers like this, instead of focusing on getting a job in the telco/cable industry after their public service term is up...
That's a first, Americans not getting something before everyone else, go to show that the 'american way' doesn't mean fairness for all, just greed, even more so if your rich or a company with power.
Doubt that greed is just an American thing.
I thought we already have this. I didn't know at&t could increase my monthly payment on a 2 year contract.
Nice going ofcom!
Especially since it almost comes into immediate effect as opposed to giving a crappy pledge i.e. 'It will come into effect 2016'.
Me personally have suffered a massive price hike with bulldog broadband and took months to resolve back in the day... Ever since, have researched every utility provider, whose service im looking to subscribe to.
Woohooo.....
Nice one, can i use this new "law" even if my price was increased in 2013?
No i believe it only works on new contracts.
Does this only cover contracts signed from now on, or those pre-existing ones as well?
Only new ones i believe. Sadly.
Great news thanks ofcom!
Virgin Media does it £1.75 at a time. Then gives you a "free" upgrade on speed some time later.
Hm, never heard of anything like that here in Sweden. If you sign a contract on a price plan you'll have that price plan until you sign for a new one or cancel your subscription. So, basically indefinitely.
Funnily enough this move will cause most plans to include a guaranteed price increase each year. O2 has already reworded their contracts to include a guaranteed fee increase every year to match inflation (2.7% price rise on the 1st of March this year for example). Previously customer contract prices would typically remain stable.
Will they also do the thing where your monthly rate is technically the same, but they add some other unrelated fee to it?