We’ve been celebrating Ofcom’s new rules to protect consumers from mid-contract price rises. But O2 has found an opportunity to sting new customers with another price rise and we’re calling for action.
I will remember Thursday 23 January for two things; a big win for consumers as Ofcom’s rules kicked in, and a big groan as O2 unveiled a price rise.
You see, we came full circle with our Fixed Means Fixed campaign, which had the backing of 60,000 of you. Ofcom’s new rules now mean you can leave your phone or broadband provider penalty-free if it unexpectedly hikes prices mid-contract.
O2 announces a price rise
However, O2 announced a mid-contract price hike of 2.7% for its eight million pay-monthly customers, due to come into effect in March 2014. Unfortunately, the new rules permit price rises for existing customers and new customers as long as these new customers are told about this at the point of sale. Now O2’s using this loophole to hike prices for new customers who signed after 23 January 2014, as O2 says it will warn them that inflation-matching price rises will hit them on a yearly basis.
Plus, since these hikes will be measured by the rate of RPI (retail prices index) you won’t even know how much you’ll end up paying. And those who join O2 after Ofcom’s rules take effect still won’t be able to leave their contracts without penalty.
We don’t think that’s right or that O2 is following the spirit of Ofcom’s original announcement. We stand by the message of our Fixed Means Fixed campaign, and we’ve been in contact with O2 to tell them this. You can also help us up the ante by emailing O2’s chief exec to tell him to rethink O2’s approach.
Three won’t hike prices mid-contract
Thankfully Three Mobile has embraced Ofcom’s new rules:
‘Your fixed monthly recurring fee from Three will not go up in the minimum term of your contract. We support Ofcom’s approach to fixing the price for pay monthly contracts for their duration. We think it’s only fair that customers should have clarity around costs when they sign up to a contract.’
We’ll be keeping a close eye on other providers to make sure they follow Ofcom’s rules, rather than following in the footsteps of O2.
[UPDATE 28/01/2014] Vodafone has confirmed that they will respect Ofcom’s new rules. You can see this in section 11 of Vodafone’s new contract T&Cs:
‘We will respect Ofcom’s guidance on mid-contract price rises. We will continue to notify customers of increases to out-of-bundle call prices a month in advance, with significant variations also potentially allowing a customer to leave their agreement.’
Are you an O2 customer? What do you think of O2’s latest price rise?