/ 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

I have only been with O2 for a few months and like most users believed that a ‘Fixed Contract’ means just that….or am I being naïve?
It is such a shame that suppliers feel that it is OK for them to change the terms of their contract with their customers and there is nothing we can do about it BUT God help us if we object or try to change our conditions…..we are hit with great big bills for wanting to change the contract and if we want to terminate the contract we then have to pay very large exit fees. Why can’t they be reasonable as this must cost them a fortune in disgruntled customers who leave when their contract come to an end to look for suppliers who will keep to the terms of their contracts?
I can understand an increase if taxes (eg VAT) change, that is beyond their control but NOT for any other reasons….other charges (eg Inflation) should be built into the original contract….that cannot be too hard to do as they will only have to calculate a maximum of TWO YEARS increases!
Other than this I am pleased with O2 BUT will be changing to another supplier at the end of my contract because of this….I hope they think this increase is worth it!

Being cynical; could this be an effort to put more money in the coffers ready for the forthcoming 4G auction? I also find it hard to accept the argument about the additional charge being unavoidable as O2 have been able to make a number of reductions to their tariff’s and offered discount deals over the course of the last year!

peter says:
21 December 2012

just recieved this from O2 customer complaints, ive removed names, from the bottom, for privacy reasons, but can supply to which if they request it from me.
the date of my transaction with O2 was 31/10/12.

Hello Peter

Thank you for contacting us about the price rise announcement.

I understand you aren’t happy with the increase in tariff price.

The decision to increase the prices was introduced recently. This may be
the reason it wasn’t discussed with you at the time of purchasing your
contract with us.

Price increases are never welcome and this isn’t a decision we’ve taken
lightly.

It’s not that we’re ignoring our customer complaints but the truth is we
kept the price increase on hold as long as possible. However, we had to
make a change and increase our prices now to be in line with the current
RPI (Retail Price Index).

This change is only applicable to Monthly Line Rental Charges which
means everything else stays the same including charges for calls, texts,
Bolt Ons and data.

This change is reflected in our Terms and Conditions which states we may
increase our charges from time to time. If we increase our charges, we
have to let you know at least 30 days before the charges are due to go
up and we won’t increase the Monthly Line Rental Charges more than once
in any 12 month period.

Your tariff will from 28 February 2013 and I’m afraid we won’t be able
to stop it.

We value all customers and do appreciate their business with us but this
is something we don’t have control over.

I really appreciate your understanding with this matter.

Regards

*****************
Telefónica UK Limited
Customer Relations Executive

Confidence trick says:
21 December 2012

Just received this reply to my complaint to O2.

Dear

Thank you for contacting us about the price rise announcement.

Price increases are never welcome and this isn’t a decision we’ve taken lightly. We’ve held off putting our prices up for as long as possible but now we have to increase them in line with the current Retail Price Index. However, it will help enable us to continue to invest in the services that matter to our customers while still offering value for money, such as priority moments,O2 Gurus, O2 WiFi and O2 Recycle.

This change is only applicable to Monthly Line Rental Charges which means everything else stays the same including charges for calls, texts, bolt ons and data.

This change is reflected in our Terms and Conditions which states we may increase our charges from time to time. The sales advisor, who arranged your upgrade, on 3 December 2012 didn’t know there would be a future price rise as this hadn’t been announced by the business at that time.

If we increase our charges, we have to let you know at least 30 days before the charges are due to go up and we won’t increase the Monthly Line Rental Charges more than once in any 12 month period.

I hope this helps. If you’ve any more questions, please get in touch.

Kind regards

peter says:
21 December 2012

So its clear that O2 are admitting openly that their sales people are not telling us.

is this not the evidence we need?

which… anyone on your legal team who can comment.

regards peter

As already stated, contracts should be clear and precise.(ALL Details). At the end of my contract its goodbye o2. If this happens again with o2 broad band,it will be goodbye o2. Remember the past (Nobody on the buses PUT THE FARES UP)
YOURS.

Numbercruncher says:
22 December 2012

I wrote to O2 arguing that I was not contractually bound to pay the proposed increase because of misrepresentation of the deal I was offered and because it could be challenged under the unfair contract terms regulations. I proposed they should waive the increase otherwise I would consider terminating the contract and would not be liable to pay a termination fee because of the provisions contained in paragraphs 5.3 and 5.4 of the terms and conditions. Paragraph 5.3a says if they increase the price by more than the RPI increase you can terminate the contract without having to pay the remaining monthly contract charges. In my case, the increase would have to be no more than 49p to avoid going over 3.2% but the increase is 50p, which is fractionally higher at 3.2258%. A 3.2% increase would be 49.6p so their increase is 0.4p too high. I think the wording of paragraph 5.3a makes the RPI an absolute limit to any increase and 3.2258% is clearly higher than RPI. I can find no provision in the terms and conditions to allow an increase fractionally above RPI in order to round up to a convenient amount. I’m not sure what the legal precedents are on rounding up and rounding down but I think O2 can be challenged on this point. They should have rounded down to the nearest penny to avoid a risk of challenge.

O2’s reply didn’t deal with the points I raised other than to say I would have to pay termination charges if I cancelled, which I think is incorrect since the increase is more than RPI. Their reply simply repeated the standard company line and was very similar to replies reported by others taking part in this conversation. I don’t think it is worthwhile for me to cancel my contract or serve court papers on O2 because the total increase to the end of my contract is only £6 and I have just reduced a data bolt-on which will save me of six times that amount. Others facing a much bigger increase and are at the beginning of a two year contract may find it worthwhile checking the actual % increase O2 are proposing to see if it is more than 3.2%. I suspect O2 have not considered the rounding issue when calculating the increases and some are fractionally above 3.2% and some fractionally below 3.2%. To challenge O2 on this basis you would need to establish whether my assumption that rounding to the nearest penny would trigger paragraph 5.3a if the % increase is above 3.2%.

It’s funny, but another industry whose terms are under dispute, the energy industry, seems to think that ‘fixed ‘ does mean fixed… Or at least, my contract with npower has had a fixed tariff for nearly two years now.

Rakesh says:
26 December 2012

I been with O2 from last 10 years now, started with PAYG then moved to Contact Deals. Currently I am on 18months iPhone Contract. My Bill should be £36.00 every month but From 28 February 2013 my mobile line rental will increase by £1.15 a month to £37.15 a month. That’s a rise of 3.2%, the same as the current rate of inflation.

Paul. mcg says:
28 December 2012

I am Disgusted , I purchased an iPhone 5 from O2 in September and made a point of asking if the if the tariff would be going up , I was told it was fixed for the term of the contract .

AlanP says:
28 December 2012

I have 2 iPhone 5’s on 2yr contract with appx 20months to run. I bought my phones on a fixed price/term tariff over the phone with O2, and am certain this price raising ability was not mentioned.

Is there a collective “mis-sold” group being formed?

Why, when Telefonica UK results (according to their own website) are strongly positive in terms of net customer gain etc, are they insisting that they “had” to do this? I would argue that their financial planning (or lack thereof) is irrelevant to me as a fixed rate/term customer unless they are entering bankruptcy and my service is threatened. As a company they offer a variety of “peripheral” services, why not make these chargeable options rather than increase my “fixed” rate? I don’t use most of them anyway, and would happily see most of them scrapped if it meant not increasing my rate. We need to move as one as a group and work together to stop this ridiculous action, as individuals they can simply deny our requests for compensation (being relatively immaterial individually, most will let this slide) and ignore our complaints. I will be leaving O2 as soon as it is my most economically viable course of action, until then I want to fight this utterly unjustifiable action.

Man On A Misson says:
29 December 2012

Just to let everyone know, O2 has yet to respond to my notification that I’ll be terminating my agreement as per clause 8.4c of the contract I personally signed. This was posted to O2’s Complaints Review Service on the 18th Dec 2012 and received and read within an hour of posting.

O2: “Thanks for your email. We’ll get in touch to discuss it within 7 working days.
If you’d rather talk to us sooner, our Complaints Support Team are ready to web chat to you.
Just click the button below to start.”

Well, 7 days, in fact 7 working days has been and gone and not a peep from O2 save two texts telling me that my connection would terminate on 16th Jan 2013. No mention of a termination fee and nothing has been sent in the post.

Being the sceptic that I am, I tried to chat with this complaints review team and they claimed the disconnection was done by somebody the day before after I turned down a request to close the account (without fee) because O2 was asking for the phone supplied by Tesco. While this may seem unreasonable of me, you need to understand that O2 had nothing to do with that phone and I was told by Tesco that if I gave it up to O2, then Tesco would bill me for that phone on O2 closing my account.

I made it totally clear to O2 that I was not going to accept this offer, simply explaining to them that I would be holding them to the contract I signed and at this point, I was told they couldn’t close my account on this basis and I’d have to write to the Complaints Review Service. But as you can see, they still went ahead and set the account up for closure, ‘WITH’ a termination fee
but without my consent and without telling me, other than two texts that make no mention of this termination fee, even though every time I talk to them, they still tell me I’ll have to pay it.

With regards to clause 8.4 of ‘My’ contract, it also says under paragraph 8.4:

8.4 You may end this Agreement at any time by giving us notice if:
(a) we break this Agreement in any way and we do not correct the situation within 7 days of your request;

in addition to the clause I’ve been trying to clause the account via;
(c) we increase any of the Charges for the elements of the Service you are using or change this Agreement to your disadvantage. In this situation paragraph 8.3 will not apply.

For all those a little confused, it appears the contract I signed is rather different from the one on O2’s website but I have been assured, the contract I signed is (was?) a genuine O2 contract and even now, while O2 refuses to honour this contract, they still want to hold me to it. How rich is that?

Basically, Paragraph 8.4 (of my contract) allows one to terminate without the penalty of 8.3 which allows O2 to claim the cost of the remaining contract.

In my case, 8.4(a) and (c) applies because because O2 has breached clause 11 and (c) because the changes are to my disadvantage, both the price rise but more importantly, what they have done to the contract.

They have also failed under 8.4(a) since they have failed to respond within 7 days (note, my contract doesn’t say ‘working days).

I gave them 30 days notice, even though it appears that under 8.4, it simply says;

“8.4 You may end this Agreement at any time by giving us notice if:”
Does this mean that in this case, it can be any period of notice?

As I’ve pointed out, O2 refuses to comment on the contract I signed, will not comment at all, on paragraph 8.4 period.

If they have not responded after 30 days, can this be deemed as O2 accepting my notice as this seems to be the case in reverse.

I was really stung by this as I took out two contracts with O2 both in October…so how does RPI possibly apply to me when they are new contracts?! Not even upgrades. First time with O2 and this is how they welcome me.

Man On A Mission says:
31 December 2012

Yes, this is absolutely disgusting, especially since just a few months earlier, O2 claimed they don’t do this sort of thing. ;www.guardian.co.uk/money/2012/oct/05/vodafone-fixed-contracts-outrage To quote,

“O2 told Money this week that it had not increased prices midway through contracts, and had no plans to do so” Article dated 5th October. this was the whole basis of me personally signing with O2, they assured me that even if prices changed, it would not affect me as I was signing a fixed contract. I specifically pressed O2 on this and they lied without a flinch.

If that all leaves you seething, could someone explain why this doesn’t appear to affect O2’s business customers? http://www.o2.co.uk/desktop/prices; (see “In my Business contract, it says …)

“In my Business contract, it says I won’t be affected by any price increases.
Please speak to your O2 Account Manager. We’ll look at your contract and check what this means for you.” ‘What’s good for the gander …’ doesn’t seem to apply to O2

How can O2 justify this price increase when their level of customer care and support has fallen so dramatically?

Sam Wardill says:
31 December 2012

Thank you @man on a mission. This is just what I wanted for my ombudsman submission!

Man On A Mission says:
1 January 2013

Sam, you’re more than welcome. I haven’t got to that stage yet but if possible, I would really love to talk to you off forum as maybe we could help each other. As has already been posted a number of times now, the contract I signed, while it still appears to be a genuine O2 contract, is far removed from the contract O2 is trying to cite now. I’m sure that I have more than enough ammo to terminate my agreement but O2 refuses to talk about the terms of my agreement. It seems they would rather put their heads in the sand and pretend it doesn’t exist. When I posted my notice and complaint, they promised to get back to me with 7 ‘working’ days yet that is long gone now. Even in my contract, it clearly says:

“8.4 You may end this Agreement at any time by giving us notice if:
(a) we break this Agreement in any way and we do not correct the situation within 7 days of your request; … In this situation paragraph 8.3 will not apply.

8.3 is that clause that allows O2 to hold you to the charges of the remainder of your contract.

I have done my best to explain to O2, that to date, they have never notified me of a change to my contract and as far as I’m concerned, the terms of ‘my’ contract are the only terms they can currently hold me to.

I’ve had excuses ranging from, “Tesco have given you the wrong contract, but you’re still legally bound by it” yet in the same breath, refusing to accept the terms of that agreement.
“Do you really think a company as big as O2 would use terms like that ?!?! I mean, everybody would be leaving !!!!!!!!” Yep, that really was said to me 🙂

The advisor’s that have initially been interested have asked me to give them a chance, asking me for a copy of ‘my’ contract. (why don’t they have their own copy?) on receipt of said contract, I get the stock response, “Oh, I’m sorry but we can’t help. You’ll need to email the Complaints Review Service (already done, 7 day promise to get back to me has long gone).

I’ve explained that they are in breach of 8.4(a) for a whole host of reasons, not least the fact that they have failed to notify me of a change to my contract which is clearly to my ‘disadvantage’, let alone within 30 days along with the fact that they have failed to resolve the issue of those failures within 7 days. All of this is in addition to the fact that to date, they have refused to honour 8.4(c) “we increase any of the Charges for the elements of the Service you are using or change this Agreement to your disadvantage. In this situation paragraph 8.3 will not apply.”

Clearly, if you compare the contract I signed to the one O2 is trying to quote me now, it is not just to my ‘disadvantage’ it is to my ‘significant disadvantage’, a term now used by O2 in their latest contract. I’m quite happy with the contract I signed (save O2 failing to accept it) but this new contract, nobody in their right mind would want to agree to such a vague and subjectively worded contract. This is the contract O2 is using to lock everyone into without a hope of escape. For example when it comes to citing ‘significant disadvantage’ guess who gets to decide what’s ‘significant?

I have done my level best to explain that had this been the agreement O2 was looking for me to sign, I’d never in a million years, agree to such terms. In my case, I did actually check all this stuff out first but even that it seems, is not enough as O2 just do what they want regardless of what your contract may say.

For all those who hate reading contracts, this is why it is so important to do just that and I’m so sorry for all those that didn’t sign via Tesco and have already been locked in to this heavily unbalanced contract.

For all those that signed via Tesco, please, please, if you want a chance of leaving, go find that original contract, the one you signed in store. As of Sunday 30th Dec 2012, Tesco is still signing customers to O2 via this contract and O2 are blindly accepting new customers via tesco while refusing to accept the terms of the contract. This is how things stand for me, as of 31st Dec 2012.

I really hope someone out they can make this work for them. For me, it looks like, as per the terms of ‘my’ contract, I’ll be doing a 180 mile round trip to O2’s head office in Slough with a view to forcing O2 to accept 72 hours notice to end the agreement on the basis of the terms cited and I’m sure it’s going to be messy. 🙁

If anyone who is in a similar position, ie, those who’ve signed the same contract as me, I’d love to speak to you, maybe we can all help each other 🙂

Jayne Samuel-Walker says:
2 January 2013

I have four mobile phone contracts with O2 and, at the time of purchase, I have never been warned that O2 can vary the terms of the contract at will.

Is this not a case of mis-selling similar to that of PPI and the banks?

Sam Wardill says:
4 January 2013

The Ombudsman wrote to me today. They have decoded not to accept my complaint for investigation. “Mr Wardell [sic] appears to consider the relevant term within his contract to be unfair. Under the Unfair Contract Terms Act, we are unable to rule upon whether a contract term is unfair. Only a court or certain qualifying bodies are empowered to make such a ruling. We are not such a qualifying body.”

I will be issuing a letter before action today to allow me to go down the small claims route.

Ha ha haaa… and so we are all still waiting for OFCOM’s wonderfully incisive decision prrocess to tick over are we Which?

Months and months and months and MONTHS after all of this began!

And even after all of this poor man’s personal efforts, all OFCOM can find to say to him, even NOW, is “we are unable to rule upon whether a contract term is unfair…”

Really… what IS the point of OFCOM then and this charade fo waiting and waiting for them to FIX ANYTHING!!!

Absolutely disgusting!!!

And YES the so called Consumer Ombudsman is just as bad!!!

Layla says:
5 January 2013

If O2 still continue with this price rise, I am not going to continue buying bolt-ons for the remainder of my contract. I will try my best to stay within my allowance and not give them the satisfaction of even more money.
If we’re all able to do this, it could make the price increase seem like a bad idea.