Victory! Ofcom’s new rules to stop mobile price hikes

by , Conversation Editor Technology 23 October 2013
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We won! Together we convinced Ofcom to take action on mobile phone price rises. The regulator today announced the results of its consultation, which was as a result of our campaign.

People celebrating with mobile phone contracts

Ofcom opted for our preferred action – to let you exit your contract without penalty if your mobile provider wants to hike prices. These new rules will apply to contracts signed after 23 January 2014. Ofcom’s Claudio Pollack said:

‘Ofcom is today making clear that consumers entering into fixed-term telecoms contracts must get a fairer deal. We’re making it clear that any increase to the monthly subscription price should trigger a consumer’s right to leave their contract – without penalty.’

Working together to convince Ofcom

After heavy lobbying from the mobile companies, there was a very real threat that nothing would be done at all. However, Ofcom has stood firm and done the right thing.

We’ve been working hard to convince the regulator to make the right choice. This year our research confirmed that most of us don’t understand ‘RPI’ price rises, and our undercover mystery shopping demonstrated that mobile phone shops aren’t being all that upfront. And you’ve been busy too, signing our petition and spreading the word.

It takes time to turn an entire industry around, but with the support of more than 58,000 of you, we convinced Ofcom to take action on unfair mobile phone contracts.

The birth of a campaign

Back in 2012, thousands told us that you were confused and annoyed about price hikes from your mobile company. We agreed – the mobile industry wasn’t playing fair and so we launched our Fixed Means Fixed campaign.

We’ve witnessed mid-contract price rises from all the big mobile companies (Vodafone, Orange, T-Mobile, Three, O2). This resulted in their customers having to collectively pay £123m more than they’d budgeted for.

The big kicker is that you can’t show your dissatisfaction by voting with your feet. Many were stuck with months left to pay, with your provider expecting you to pay it all up if you wanted to leave. All the while they pointed to little-known terms in the small print. That’s about to change.

Your support secures victory

Thanks to you, millions of mobile phone, broadband and landline customers will benefit from new rights. If mobile providers want to hike prices on fixed contracts, you’ll be able to show them what you think by cancelling without having to pay a penny.

The new rules should also be an incentive to stop providers from increasing prices in the first place – so that they can keep their loyal customers.

This is your victory, so make sure to share it with your friends and family. We’ll be keeping a watchful eye to make sure these new rules are implemented swiftly. Congratulations!

80 comments

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wavechange

Brilliant. This is a good opportunity to advertise what Which? is doing for consumers and perhaps pick up some more subscribers.

What happens in the case of a contract that includes a mobile phone? Can the company demand its return if you cancel a contract because of a price rise?

Hi Wavechange, the rules come into force in three months so that mobile providers have time to change their T&Cs, so we don’t know how they’ll interrupt it. But it’s exit without penalty, so shouldn’t be a problem

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wavechange

Thanks Patrick.

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giverous

I suspect this is another reason for O2 splitting handset payments away from contract payments. That way they can let you exit the contract for your services, and keep you on the hook for the handset payments.

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paul

Is it ironic that my phone company vodaphone text me today to let me know that they’re increasing my prices – starting in december?..

Do you have more information you can send us Paul? If you do, please send to http://conversation.which.co.uk/contact-us/

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Barry

Message received from Vodafone says:

“We’re making some pricing changes for services outside your monthly allowance of minutes, texts and data from 1 December. If you find yourself frequently using more than your allowance, we have some useful ways to help keep your costs down. Find out more here

http://www.vodafone.co.uk/pricingchanges21

Thats the message I received today at 10:55am. What significance does this have for my current contract obligations?

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Anonymous

yes i had one but they dd not inform me that vodafone to vodafone they stopted they said they couldnt tell everyone im a disabled person tried to get sense why 3 bills were hughe i got no where its cost me nearly £1,000 my carer has the other number of mine there on phone long tme 2 make sure im safe and if im down they keep me chatting to help me i have asked my money back on the voafone to vodafone calls they lied again today said theres 07 numbers on it ive even was told it was internet funny both phone o not connect to internet 2 old, seeing your post proves they sent price hikes 2 all why did they not tell me and leie to me ive lost count times ive called emailed them now i can ill afford £1,000 , punds after brain op and stroke im tring to find anyone who can advise or help on who i get intouch with for help

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john lloyd

You have my every sympathy but I cannot understand your script. If you could make yourself to be clearly understood one could support you more. I realise that “textspeak” is fashionable but the rest of us don’t understand what you are trying to say. Take a few minutes to try to make your comments comprehensible and we can all try to help. Gobblededook we don’t fathom.

Hi Barry, thanks for sharing that. We’ve had a look. Ofcom’s announcement covers in-bundle things, like the fixed price of your contract (eg. £25 a month), your minutes, data etc. These are charges that aren’t included in your fixed contract when you sign.

Anonymous – we’ll be in touch to help you. John, appreciate it can be hard to understand others, but I don’t think their intention was to write in text speech.

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NFH

A big well done to Which and a victory for common sense.

Even better, I would like to see 30-day SIM-only contracts become the norm across the industry; there is no need for these long contracts if we do away with combined selling of phones and service contracts. I would like to see unbundling of the goods and the service to promote competition and transparency.

Subsidising handsets through inflated monthly service charges:
- Encourages consumers to acquire handsets they cannot truly afford through an unhealthy “buy now pay later” consumer debt culture with a disguised loan from the mobile network.
- Distorts competition by disguising the true price of the handset and of the service, as opposed to a SIM-free handset and SIM-only service.
- Encourages wasteful acquisition of new handsets because consumers mistakenly believe they are receiving the handset for free or for very little.
- Necessitates long contract durations in order to spread the cost of the handset, which inhibits competition by preventing consumers from switching networks.
- Causes consumers to continue paying the inflated monthly charge even after they have paid off the subsidy of the handset, unless they remember to take action at the end of the minimum contract period.

Subsidised handsets are usually SIM-locked which:
- Inhibits competition as it makes it more difficult to switch networks.
- Prevents consumers from using local SIM cards abroad, allowing UK networks to impose unreasonably high roaming charges by excluding foreign competition.

For these reasons, Ofcom should encourage unsubsidised SIM-free handsets and competitive SIM-only contracts to become the norm, as is common in many other countries. At the very least, networks should be forced to unbundle the monthly handset subsidy repayment and the monthly charge for service (like O2 have started doing), itemising the two separately with independent contract durations and even an APR for the loan. The monthly handset subsidy repayment should not be allowed to continue after the cost of the handset has been paid off.

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Steve

I wholeheartedly agree – the more people who see these long contracts for what they are – a punitive tie-in, the better. I believe that 24 month contracts are inherently unfair – who knows what their circumstances are going to be in 24 months time?

Unbundling the handset and services costs is a sterling idea and one that I think Ofcom should encourage as much as possible. I do not believe O2 have done this out of the goodness of their own hearts, but as a way of circumventing the Ofcom ruling – there would be nothing stopping them from raising the payments for the handset for example and not allow contract termination. Admittedly it’s a tactic more likely to be used by the likes of Three – they are a law unto themselves and excel at extremely poor service.

At the very least, the networks should be forced to include in their promotional materials, the true cost of the handset versus buying it outright at the manufaturers RRP and a comparable sim only deal.

The least Ofcom could do is mandate that 30 day contracts must be available for all handsets at service prices comparable or better than those lengthy contracts.

As far as sim-locks go, they should be made unlawful. There is no case business or otherwise for having them. If you decide to use another provider, you are still under contract to the original provider. Sim Locks are anti-competitive, pure and simple.

Three Mobile welcomes the announcement:

“Three welcomes Ofcom’s announcement. This is really good news for consumers. It will make it easier for mobile users to make informed choices, and will encourage consistency and transparency in contract pricing. The threat of mid-term contract price rises added complexity and confusion to what should be a clear and simple choice for consumers.”

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wavechange

Perhaps Three should have thought about these things last year, before putting up prices for customers on contracts.

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Rich

Does this work retrospectively – all those who were told they couldn’t leave their term, or opted to carry on paying under protest – does this mean they can now leave and/or be reimbursed?

Three may well now welcome the news, but they penalised many people last year when they felt common sense was irrelevant.

Hello Rich, I’m afraid not. It’s your comments and support from angry customers that got us this far and led to this change. The new rules will mean that providers will have to let you exit in the future.

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Rich

Must suck to be someone who took your earlier advice, then. I’m glad I folowed my own path.

Though I do appreciate the work Which? have put in on this matter, I find the outcome to be something of a hollow victory for the hundreds and thousands of people who came here for assistance all those months ago.

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Rich

Ooh, based on the voting of my comment, it seems quite controversial. That’s somewhat shocking to me, but hey-ho

.http://conversation.which.co.uk/technology/three-mobile-pay-monthly-contract-price-rise-cancel/

That was started in May of 2012 . In December’s last year, Which? concluded that the mobile companies stood to gain an additional £100 million or more in additional profit following those price increases.

We’re now 17 months from the beginning of that conversation. People could, and with hindsight should in my opinion, have left their contracts because the price increases were unfair, and the terms and conditions were often poorly written and/or implemented. They simply were not enforceable.

Advice from here was to pay under protest and await the ruling. Sadly, it has taken a rather long time to arrive at the said ruling, and as it is not retrospectively applied and the majority of people in that discussion will now be well outside of their contractual terms, this does feel hollow.

A win for Which? and consumers, certainly. I’m very glad that cutie contacts will be fairer for the consumers entering in to them. But it does feel extremely hollow for those who were stung all those months and years ago. Those of us who stood firm and left have become wise to the potential pitfalls, and many moved to PAYG. Others who weren’t in a position to stand up for themselves so firmly are the ones who have ultimately lost out.

The mobile companies may have made an additional £150m since May 2012. Future contacts may be better for consumers after these changes, but the winners were the mobile companies.

Hence I am glad Which? took action, but it still feels quite hollow for those who were affected at the time.

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Rich

Swiping keyboards have a lot to answer for. Cutie contacts? Rubbish punctuation? Oh dear. Sorry! Hope it makes sense overall.

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Anonymous

can anyone please help vodafone have taken nearly £1,000 , of me im disabled they did not inform in anyway at all theyd stopted vodafone to vodafone they have told me all different storys i got botto ast friday but that was 3 bills over nearly 400 pounds each i kept phoneing emailing asking why no one would tell me infact they bare faced lyed told me it was internet allsorts never 1′s real reason no my carer has the 2nd number to ake sure im safe im alone i had brain hemmrage and a stroke, my carer sometimes can be on a hour if im not well or down i honestly havent got the oney they already took it , now theres no money to pay my normal bills ive no money for food nothing is there any body or department that could help me please its not like id not tryied to find out what was going on i did i dont know where to turn please advice who if anyone i can get some help off 2 get the money from the vodafone 2 vodafone calls which was in my contract and they pushed me into another year or they cut me off there must be someone who can help me

Hello Anonymous – we’re worried about how you’ve treated and so will be in touch to help you.

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Steve

Sorry, but that’s of no use to me (or many many others I suspect) who will never sign another mobile phone contract again. There is simply no good reason to do so. The amount of stress that I went through with Three was extraordinary – they have absolutely no morals whatsoever and very much doubt any of the other networks are any better. Frankly, I want my money back from three – something their own contract provided for before they attempted to retrospectively change it. Their ‘interpretation’ of their own contract was effectively the same as saying night is day.

No, these companies have lost my trust and I will never again sign a contract that ties me in for any more than 30 days – it’s all they deserve.

As far as handsets go, I’d rather buy mine outright and be able to flick the bird (if you’ll excuse the expression!) to any company that dares to give me poor service.

The sooner GiffGaff get 4G and a decent signal in my area, the better – they are the only company who have the common decency to trat their customers as people and not cash cows.

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John Ward

This is a terrific campaigning outcome – a real “back of the net!” moment to enjoy. I think NFH has spelled out excellently the kind of consumer covenant that ought to exist with mobile phone contracts – and, by extension, with other utility supply contracts. His concise analysis of the issues and remedies is perfect. Long term contracts and adverse small print should be outlawed for such a universally-required facility.

I give Two Stars to Ofcom – they would have got three if they had acted sooner [although I acknowledge that keeping up with this industry when in profit-driven rather than user-driven mode is nigh on impossible].

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Jim M

So if this doesn’t come into effect for 3 months, it makes sense to hold off on entering into a fresh contract I suppose!

Glad I found this. Thanks,

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alamaias

This seems like it will force the seperation of hanset and contract. I have never bought a mobile outright because it inevitably works out cheaper to get the handset with a more expensive contract. Not sure how i feel about this :/

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alamaias

*invariably, not inevitably.

Just a bit more detail for you:

This Guidance sets out that:

Ofcom is likely to regard any increase to the recurring monthly subscription charge in a fixed-term contract as ‘materially detrimental’ to consumers;

providers should therefore give consumers at least 30 days’ notice of any such price rise and allow them to exit their contract without penalty; and

any changes to contract terms, pricing or otherwise, must be communicated clearly and transparently to consumers.

http://consumers.ofcom.org.uk/2013/10/protection-for-consumers-against-mid-contract-price-rises/

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Adam

So if my contract has been increased in the past 12 months (which it has) am I know liable to cancel without problems now?

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Adam

Now*

The new rules come into effect in January 2014, so afraid not. Still worth talking to your provider and mentioning this announcement, they may take a different view.

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Phil

Does this mean that even small price rises when you are in contract you can leave without financial penalty.
The reason I ask is I’m with T Mobile and over the last few years they have kept prices increase inside their T&C’s.

Yes, any increase. Mobile providers will likely have to rewrite their T&Cs

Vodafone, EE, Sky and Tesco Mobile comment:

Vodafone: “We have received Ofcom’s decision on the consultation on mid-contract price changes. We will be taking some time to review this lengthy document so that we can fully understand what it means for customers.”

An EE spokesperson said: “We welcome Ofcom reaching a decision on this issue and are considering the detail.”

Sky: “In removing any ambiguity about definitions of material detriment, consumers now have greater clarity over their ability to switch telecoms providers when their subscription prices change, which we welcome. At the same time, it creates a level playing field across all communications providers, which we also support.”

Simon Groves, Chief Marketing Officer of Tesco Mobile said: “Ofcom’s statement today in support of protecting consumers from mid-contract price rises for landline, broadband and mobile services is an approach we fully support. In March 2013, we announced our Tesco Mobile Tariff Promise: our commitment to fix our core tariff prices for the duration of a customer’s contract.

“We believe it’s only fair to stick to the contract that we make with our customers. Since launching our Tariff Promise, our honest and open approach has been warmly received by all of those who subscribe to our network and because of this we will be also launching a Tariff Promise for our Broadband customers.”

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BabyParrot

As this is not retrospective, not much help to the thousands of us already locked into a two year ‘fixed price’ contract. Also let’s face it, as all the providers are as bad as each other, who would you switch to. If lthey all increase their prices at the same time and at the same levels, where would you go anyway! If as has been suggested, the energy companies have been colluding, what’s to stop the phone companies from doing the same

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Stephen

It’s not retrospective so people who saw price increases in the past are not affected by this. That doesn’t mean that people who are currently in existing contracts but see price rises in the future can’t use it.

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william

Sorry for not sharing the love, but to me , this doesn’t go far enough. I’m half expecting a wave of price hikes to hit before the new year just to bet the deadline. These rules should have been implemented now, or at least within 30 days, to prevent mobile phone companies from giving 30 days notice of a price hike.

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NFH

The next step with mobile phone networks will be forcing them to cease their unlawful above-cost payment surcharges for not paying by direct debit, which are outlawed on contracts starting since 6th April 2013. Almost all the mobile networks are blatantly ignoring the Consumer Rights (Payment Surcharges) Regulations 2012. The worst culprit is Three which openly states on its web site “You’ll be charged an admin fee of £4.08 each month if you pay by internet or telephone banking“. How can a company state so blatantly on its web site that it is surcharging unlawfully and the authorities take no action?

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David

Excellent work guys! And welcome to me as a new subscriber :)

Can you work on the internet services next? Virgin media keep hiking my bill every few months with no way to leave.

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Tom

So if i entered a 2-year O2 contract in December last year and they want to increase my monthly payments in February, i can cancel? Or is it only people taking out contracts from January onwards? Good article, and well done Which!

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NFH

No, you couldn’t cancel. You’ll have to put up with potential price rises until the end of your contract.

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Carol

That’s not how I read it, if the price rise is after Jan 2014 regardless of when you took out the contract you will now be able to cancel without penalty.

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Stephen

Yeah, it just doesn’t affect price rises that have already happened.

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Chris

If it was a good article you wouldn’t need to ask your question. Good consumer journalism covers all the bases.

Afraid not, as said in the post ‘These new rules will apply to contracts signed after 23 January 2014.’.This is because providers will have to interpret the rules and update their contract T&Cs. However, we’re talking to providers to convince them to accept the rules for all customers.

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waynep

This is fantastic news for consumers, WELL DONE WHICH!!!! I will be subsribing, I need a new TV and everythin I have purchased with a WHICH recommended label thus far, has lasted and performed far better than I anticipated.

Thanks Wayne, and glad you’re finding our reviews useful! Remember – all the money we make from subscriptions goes back into our business, including our campaigning work :)

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Chris Walton

Well done which?

Another small victory for the consumer.

How about flexing your muscles on the TV companies who do the exact same to their customers by offering a fixed term contract only to push the prices up during its course, leaving the customer with few options other than accepting the price rise.

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NFH

Perhaps we need blanket legislation for all consumer contracts to mandate that where a consumer contract requires periodic payments during a minimum contract term, then those periodic payments cannot be increased during the minimum contract term (except for increases in VAT).

I cannot think of any scenario where a business would be justified in increasing periodic payments during a minimum contract term. If businesses don’t like it, then they can stop imposing minimum contract terms.

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colin

Well done Which, at last we have someone to take on these companies! hopefully to stop hike price on energy companies in future? If government cannot control!. Good luck in future with all.

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Martin Cairney

Well done Which? It just shows what can be achieved when the will is there to fight for basic rights. Please keep up your good work.

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william

“Ofcom’s new rules to stop mobile price hikes” ok so I’m being picky, but that’s not what Ofcom are doing, they will “let you exit your contract without penalty if your mobile provider wants to hike prices”

So companies can still hike prices.

So clearly Fixed still doesn’t mean Fixed :( which would have been my preferred solution.

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wavechange

I have been wondering about the same thing, William.

If the companies decide to up their prices at about the same time, then the opportunity to cancel a contract without penalty will not be very helpful.

It will be interesting to see what is in the new Terms & Conditions. If someone decides to leave after three months of a two year contract, it seems unlikely that they will be allowed to keep the ‘free’ phone they received.

Hi William, take your point. But I’m sure providers won’t want all their customers leaving with expensive phones… This is what I wrote in the post:

“The new rules should also be an incentive to stop providers from increasing prices in the first place – so that they can keep their loyal customers.”

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william

These companies don’t care about their “loyal” cashcows, so I doubt they’ll be making changes in their favour. Hence the regulator really should have use a bigger stick.

Lets hope I’m wrong for once.

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JAY

This “may” be good news. Like ALL energy suppliers hike prices (have they EVER gone down i.e. when wholesale energy prices go down??) whenever they feel greedy (£750million profit is not enough for these scum of the earth companies), ALL these mobile companies will collude to hike prices one after the other in quick succession (if not together), so is there much point in jumping from the frying pan into the fire as such? The only “opportunity” you get is to re-evaluate the market again (all deals across all networks) and see if there is a better deal out there for you – earlier than when you could have done it before i.e. at the end of your contract. Don’t forget that there are only a few “real” network providers out there. The rest of them just piggy-back on these networks i.e. Tesco Mobile, TalkMobile. Therefore, prices will probably rise across the board. Anyway, unless these companies are fined heavily and more stringent Consumer Protection laws are brought in and enforced, this is just another industry that will continue to screw us common people (not the rich who can afford anything or get frebies from companies/brands or politicians who get most things free or re-imbursed via expenses or expense fiddling). “Rant” / “fact-sharing” over!!

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NakiLad

Fantastic outcome. Well done Which? Does this running just apply to mobile companies. Since we took out our fixed term landline contract with Sky in September, they have increased the monthly charge twice. Will landline providers also be bound by this new ruling?

It’s landlines and broadband too!

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Lou Austin

This is just brilliant,why can’t Which run all these quango,s that talk a lot but do nothing such as Ofcom,Ofgerm,Othello etc etc,if Which ran these departments all our prices would be lower and the rip off companies would have such a hard time.
Well done Which !!!

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Robert

Good news, but will not affect me at present. I complained to Virgin Media about their price rise in July and they have credited my account with the full amount of the increase that I am incurring from July to the end of my contract. Success!

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Chris

Robert – you deserve a job with Which.

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AdeOluwa

This is great and wonderful news to all consumers. Thank you Which? for this brilliant work you are doing. And I hope you are going to be extending it to the Fixed Line rentals. Sky and BT have given notice of increase to their rental charges. It is supposed to be a yearly contract.

Hello Ade, the new rules will also apply to landlines :)

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Peter

It does seem to me that the mobile companies still have the better of the situation. I sign a contract with a supplier, if I want to break the contract its costs me money, if they want to they can without any compensation to me.
As a more general point the Which idea that we can use market forces to win these sorts of battles seems to me me inherently flawed. Large corporations are clever enough and the situations usually sufficiently complex enough for them to find other opportunities for keeping up their revenues. I say this having just today received a text from Vodafone saying here are price changes for items outside my contract, eg extra text messages, extra data usage etc!

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Steve B

I have a contract with Vodafone – and I’ve also received a text telling me my prices are going up.

The link they sent me is below.

http://www.vodafone.co.uk/campaigns/price-changes/pricing-changes-21/index.htm?cide=rdr-13144-02

I was hoping that this ruling would stop Vodafone from acting like this, to people in contract.

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liz210

This is very good news but the correct result should be that we should not have been charged the extra! I do not want to change my contract as I am happy with the deal but it is unfair that they should be allowed to do this. Nobody is going to leave a good deal on their contract for the sake of a few pence which is usually what we are talking about. It is the principle that is at stake here.

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Martin Brook

Well done on this, Which? Great news!

– However, being ‘allowed’ to leave a contract before termination is not nearly good enough; The customer my well be satisfied with existing arrangements, and may well feel disinclined to fool finding an alternative provider.

If the contract arrangements have been violated by the old provider, then the remaining amount of money that the customer would have paid should be forfeited and paid to the customer by way of compensation in the same way were the situation reversed.

I’ve been using mobile ‘phones for some years now, and my requirements have always been well served using PAYG; It would never enter my mind to undertake anything so foolish as to allow these unpleasant companies to learn my bank details.

It was indeed refreshing to learn the other day of ‘Ofwat’ jumping on Thames Water when attempting to increase bills; We need to dump ‘Ofcom’, and introduce an organisation with real teeth to replace it, as right now its simply not serving the nation’s needs.

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Xter

It’s so frustrating that I was hit by the hit Three imposed on contract customers ages ago.

I paid under protest, was on the phone a lot, sent letters and emails complaining etc etc, but these new rules only apply to new contracts!

What about all the money the mobile companies scammed off people??

It’s like someone stealing something from a house and the police going “ok, well you can keep that item you stole, but don’t do it again” and slap them on the wrist.

Such a hollow victory.

I will never sign on a contract that is more than 30 days now, and I’m sure I’m not the only one, even if they have these new rules. Mobile contracts with a handset are generally a rip off when you calculate the money you will spend over the term anyway.

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Paul Wright

In the article above you state that “These new rules will apply to contracts signed after 23 January 2014″ (today) however O2 site clearly states

“On your March 2014 Airtime Plan, prices will be adjusted by 2.7% in line with the RPI rate of inflation announced in January.

From 2015, Airtime Plan prices will change every year by the RPI rate of inflation. We’ll announce the change in February and it will start from your April bill. Learn more”

Are they still allowed to this then? as looking for a new contract, but sick of these price rise’s!

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william

Don’t be fooled by the “fixed means fixed” slogan, that’s not what has been achieved. Companies can still hike prices, you can just leave without needing any other reason than you’ve hiked prices, I’m off.

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Paul Wright

Not according to O2′s website! If you look at their FAQ it clearly States:

“An increase of this kind does not entitle you to end your agreement mid-contract. As set out above, our terms for customers signing up both pre- and post- 23rd January allow us to apply a price increase to reflect RPI. ”

And they even go as far as mentioning the 23rd Jan date!

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william

Just reading http://media.ofcom.org.uk/2014/01/22/protection-for-consumers-against-unexpected-mid-contract-price-rises/?utm_source=Twitter&utm_medium=Tweet&utm_campaign=mid-contract

it gets worse, they’ve only issued guidelines

I think O2 will be reading “It sets out that if a provider wishes to increase the monthly subscription price (or prices) agreed by the customer at point of sale, customers should be given at least one month’s notice of the increase and be allowed to exit the contract without penalty.” and ignoring the word “and”.

Looks like someone will need to test these guidelines as I feared ofcom haven’t gone far enough.

Hi Paul, do you have a link to that in the FAQ? The new rules cover new contracts signed after 23 January and will allow you exit without penalty if they happen to announce a price rise. This also wouldn’t be in the spirit of the rules. Here’s a summary from Ofcom on the new rules:

From tomorrow, consumers and small businesses taking out new landline, broadband or mobile contracts should be allowed to exit them without penalty if their provider increases the monthly subscription price agreed at the point of sale.
This follows an Ofcom review into the fairness of contract price terms. This found that many consumers, in particular, were caught unawares by price rises in what they believed to be fixed price contracts.
To improve protection for consumers and small businesses, Ofcom issued new Guidance for providers which takes effect from tomorrow.
It sets out that if a provider wishes to increase the monthly subscription price (or prices) agreed by the customer at point of sale, customers should be given at least one month’s notice of the increase and be allowed to exit the contract without penalty.
It also states that any changes to contract terms, pricing or otherwise, must be communicated clearly and transparently.
Ofcom will monitor providers’ application of the Guidance and complaints closely to assess the effectiveness of this new protection.
Ofcom will also conduct research, such as mystery shopping, to assess the transparency of contractual information given to customers by providers at the point of sale.

http://media.ofcom.org.uk/2014/01/22/protection-for-consumers-against-unexpected-mid-contract-price-rises/

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Paul Wright

Yes, the link is at

http://www.o2.co.uk/desktop/prices

The FAQ clearly states that they can and will continue to increase the monthly line rental every year, although this is also made clear when you attempt to purchase a handset from them online (although admittedly some people could still miss it…)

Thanks for sending that Paul. We’re looking into it now – that doesn’t seem right at all.

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william

Martin Lewis’s Money Saving website has this to say on the subject …

http://www.moneysavingexpert.com/news/phones/2014/01/o2-to-hike-its-prices-by-2-7-can-you-leave-your-contract-penalty-free

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Paul Wright

I’ve just bought the phone i wanted on O2 via a third party website it was £5 a month cheaper and there was no mention of any price rise! Unless it was hidden in the T&C some where…

Given what it says on their website I imagine I would have a massive fight on my hands to cancel penalty free if they do increase their prices in March…

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Joaquin

I have received today a notification from O2 that the tariff on all my business phones will increase by 81p due to RPI (aka rip-off public immediately). There is obviously nothing I can do seeing we are at the mid point of a 2 year contract and the fact the never mentioned when we took the contract that it would be subject to change. Nonetheless I phoned them and told him how unhappy I was about the whole thing and that when the current contract end I shall take my business somewhere else, this I fully intend to do. – Should be fun negotiating a new contract next time.! Thank you Which!

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Stephanie

I took out a 2 year contract in mid December 2013 with O2. Today I have received a notice that the monthly charge is increasing in March due to RPI increases. I’m only just one month in. How can this be allowable? When I contacted o2 their response was that they are only increasing the monthly amount by 59p!

Hi, we’re not happy about the price hike, which we’ve written about here: http://conversation.which.co.uk/technology/o2-price-rise-ofcom-fixed-means-fixed-rules/ We’re also asking people to email O2′s CEO to make him think again: http://www.which.co.uk/campaigns/mobile-phone-price-rises/

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David Rowson

Pure arrogance from 02. I will spread the word avoid 02 they don’t deserve us. You have the right to leave a supplier if there service is not up to standard. Keep a note of any complaints and cancel your contract

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