Even if you managed to find the clause buried in your ‘fixed’ mobile phone contract that says your provider can hike prices by the rate of RPI, would you know what that means?
Ahead of the results of Ofcom’s consultation on fixed mobile phone contracts, our latest research has found that most mobile customers don’t know the rate their so-called ‘fixed’ mobile contract can increase by.
What’s RPI when it’s at home?
‘Fixed’ mobile phone contracts allow providers to hike prices as long as this isn’t higher than the rate of inflation. This is a contradiction we’ve been working to put right with our Fixed Means Fixed campaign following price rises from Vodafone, Three, Orange, T-Mobile, O2 and others. The price and all other aspects of mobile phone deals should remain the same for the minimum term of the contract.
And we now have more evidence that something must be done. Our latest research found that nearly half of us don’t know what RPI (the Retail Prices Index) actually means, and eight in 10 don’t know what the current rate of RPI is. Yet, RPI is what mobile phone providers base their price rises on. Ultimately, millions of mobile customers are being caught out by unfair price rises due to clauses and technical terms buried in the small print of contracts.
For the record, RPI is based on the cost of a theoretical basket of everyday goods and services, and it’s currently at 3.1%. I’d forgive you for not knowing what it was, or indeed what its precise level is!
Ofcom must do right by mobile customers
We launched our Fixed Means Fixed campaign last year in response to thousands of your comments here on Which? Conversation. Mobile customers from all the major providers were not happy with price rises on their ‘fixed’ contracts, and so we submitted a formal complaint to Ofcom. The regulator soon published a consultation containing four potential options – 1 . do nothing, 2. force companies to be clearer in their marketing, 3. let us opt in to ‘variable priced’ contracts or 4. allow customers to exit contracts penalty-free if prices are hiked.
Ofcom expressed a preference for option 4 and so did you when we put it to the vote. Needless to say, we don’t think much of options 1, 2 and 3, and so we’re urging Ofcom to stand firm in the face of heavy lobbying from mobile providers.
Our research clearly shows that even if companies were true to their word and were more transparent in their marketing (our mystery shopping exercise suggests that’s no certainty), there’s still a danger that most people wouldn’t know what an ‘RPI price rise’ meant. This makes it all the more important that Ofcom ensures you can escape unfair price rises on fixed mobile contracts without fear of a penalty.
Ofcom’s aiming to publish its final decision in September and we hope it will listen to the more than 46,000 of you who have supported our Fixed Means Fixed campaign. Ofcom must stick to its guns.
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