/ Technology

O2 joins the party with its price hike – are you affected?

Bubbles rising

And so the last of the big five mobile phone providers has followed the others by announcing a price rise for its existing pay monthly customers. From 28 February watch your O2 bills sneak up.

As many a Convo commenter will know, O2 is not alone in the price hike move. It was only last month that we ‘celebrated’ the first year anniversary of Orange announcing its price hike. Now O2 would like to join the party.

O2’s increasing its mobile line rental by 3.2% (current inflation rate) from 28 February 2013. You’ll only be affected if you’re on a pay monthly contract (pay-as-you-go customers are exempt), but this might make the hike harder to digest as most would think a contract comes at a fixed price.

It’s due to companies’ unfair price hikes and more than 2,000 comments that we launched our Fixed Means Fixed campaign calling for fixed to really mean fixed.

O2 price rise added to your mobile phone bill

O2 points out that for individuals, the price rise isn’t huge. For example, if you’re on its £31 a month tariff, you’ll see an increase of 99p a month or nearly £12 a year. Still, it’s the principle of the thing – fixed means fixed doesn’t it? Plus, we’ve worked out that collectively O2’s customers will pay almost £45m more a year on the back of this increase.

In many of our Conversations on mobile price rises, commenters have consistently pointed to O2 as being the only major provider not to increase its prices – and it has lasted some time despite others raising prices earlier this year. JayMusgraev gave O2 kudos for keeping its prices in check prior to the hike: ‘Seems that O2 could steal a march on their competitors’.

Until now O2 has publicly stated that it had no plans to put its prices up, indeed it has made a virtue of this. And yet, it had the same clause buried in its contract as all the other mobile providers. This clause says prices can go up every 12 months as long as this isn’t higher than the current RPI rate of inflation. We asked O2, along with the other providers, to remove this clause and they refused. Now we can see why.

Remove price rise terms from contracts

O2 says it’s giving you ‘maximum’ notice of the price rise by telling you by 17 December 2012 before implementing the rise on 28 February 2013. All current customers, whether you’re new to O2 or have been with the provider for a while, are affected. An O2 spokesperson told us:

‘Price increases are never welcome and this isn’t a decision we’ve taken lightly. At a time when our competitors have been raising the prices of their tariffs, we’ve resisted. But as external costs continue to rise, we can’t keep our pay monthly prices at the current level. For over half of our pay monthly customers this will mean an increase on their bill of up to 58 pence per month.’

This is why we need a change in the industry – these clauses need to be removed so that we know prices won’t go up when we sign on the dotted line. We hope Ofcom will act swiftly to ensure mobile phone companies are made to drop hidden clauses in their contracts that allow them to hit consumers with millions of pounds worth of unexpected price increases.

Comments
Guest
Sam Wardill says:
7 January 2013

O2 have responded to my letter before action to say they “will not be offering to waive the price increase or terminate your contract without penalty. This is our final position.” @Patrick Steen – Are you able to advise: Should I lodge my small claim now or should I wait for the remainder of the 14 days to elapse that I originally gave them to change their mind in my letter before action?

Guest

Hello Sam, here’s our guide to taking a dispute to a small claims court: http://www.which.co.uk/consumer-rights/making-a-complaint/taking-a-dispute-to-the-small-claims-court/using-the-small-claims-court/ We’d recommend that before starting court action you take legal advice on the specific legal arguments you propose to put forward and accordingly whether court action is advisable – if you have legal expenses insurance then we’d suggest you’d go through them. If not Which? Legal Service is a good option: http://www.whichlegalservice.co.uk/

However, although the Ombudsmen may not be able to rule on what is an unfair term, they should be able to help on the selling of your contract – ie if you think the possibility of price rises was not mentioned to you when you signed up. Because court should always be a last resort and the court’s “Practice direction on pre-action conduct” requires you to consider whether there is an alternative dispute resolution process you can use, we would recommended that if at all possible you take the dispute to the Ombudsman first.

Guest
Sam Wardill says:
7 January 2013

@patrick I get your point about taking legal advice. I’m not sure about your advice relating to going back to the ombudsman. If I go back to the ombudsman with a different argument do you think they might take on my case? In my case O2 did send me an instant message with a link to the ts and cs and I confirmed I read them so no argument there.

Guest
Tyler says:
8 January 2013

Can i just point out that the T&Cs consider deprimental (is that the word?) damage as a certain pertentage… However my Sky, my gas and electric, all state the same thing- if they all put their prices up at once then of course its deprimental damage!!

Guest
Frank says:
9 January 2013

Hello Patrick, I’ve looked through my Tesco/O2 agreement, particularly Paragraph(s) 5, Charges for Service and the contract does not mention RPI anywhere.
I had to use reading specs and a magnifying glass because the text is so small – approx 1.0mm which is a point size of about 2.6! I also enlarged it on my copier.
Paragraph 11, Changes to the Agreement states: We may change this Agreement and the Charge at any time. If we increase the charges for the elements of the Service you are using or change the Agreement to your disadvantage we will give you 30 days notice before the changes take place.

It seems to me that as per my earlier post, 8.4c still holds good.

Thanks, Frank

Guest

Hello Frank, this is something we’re investigating with O2. Could you please email us with details of your contract, possibly a copy, where exactly you signed up and when: conversation@which.co.uk Thanks.

Guest
Mission Impossible? says:
11 January 2013

David floors Goliath … more to follow 😉

Guest
Claire lavery says:
13 January 2013

My bill is going up by £16 a year shocking. They’re not interested.

Guest
O2 new subscriber says:
14 January 2013

I’ve just subscribed to a 24-month contract with O2 and they’ve sent me a “welcome to O2” notice with the unwelcome news that they’re proposing to raise the amount which I agreed to pay by 3.2%. On reading their terms and conditions, I see that they are only entitled to raise the charges by the RPI at the date that they notify me of the change. As the “current” RPI (i.e. the latest RPI published by ONS) is that for November 2012, which was 3.0%, they are actually proposing to raise my charges by more than RPI. I have therefore written to advise them that if they implement the proposed increase I am exercising my right to end the contract early without having to pay the charges for the balance of the Minimum Period. I shall be interested to see how they respond.

Pass the word around to anyone you know who subscribed to O2 after 18 December 2012, when the RPI for November 2012 was published.