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O2’s price rise ‘flies in the face of new rules’

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?

parrotlover says:
11 February 2014

Sorry i have not been flagged on this conversation though i am supposed to be. Can some please give me a brief synopsis. i am with T-mobile and have just receivedan EE text telling me I can now leave unless price increase is due to RPI. is this what conversation is about cos its bloody outrageous. It seen we have achieved nothing. Have I missed anything?

O2 never again says:
14 February 2014

Disbelief and disgust – what I felt when I got the email about the price rise. Surely there is some legal challenge to this for existing customers. In any case, I won’t go near O2 again.

David says:
22 February 2014

Yes I agree,,couldn’t beleive it 29p a month rise, not much but I was flabbergasted, o2 obviousy have new profiteer managers, I have been with them for 10 yrs, also when I renewed they had stopped the £8 a month deal and only had a £12 month deal with more mins I donnt need. Well will not be renewing with them again, why cant we leave them if they vary the deal? its so unfair, bloody stealing really

Anthony says:
25 February 2014

Daylight robbery by o2. I read an article today attached to an advert for o2 mobiles saying price of 2.7% in march. Then another next year in today’s guardian. I went to the o2 website, no information about price increase for this year or next year. Shame o2 and telefonica (parent company)

Olwen Charlton says:
17 February 2014

Amazed 02 done this Just think if 16000+ customers cancel @ the end of their contracts, add up to a big loss in profits ! “Tongue in cheek” 02 you will have to give up your “Think more dog” slogan too expensive. Shame on you 02.

Seriously cheesed off with O2. The whole industry (less Three, who I understand are being honourable – kudos+) need to be fined for mis-selling, and made to repay their customers, similar to the banking and insurance industries a few years back. It may only be RPI, but that’s not what I was sold. Corporate cowboys, the lot of ’em. Me, I’ll hurt O2 the only way I know, by moving to Three.

parrotlover says:
17 February 2014

It’s not just O2. EE/T-mobile are doing thrs same. I have been notified they will increase along with RIP. I am sure this will apply to new contracts. They are all b******s and Ofcom are to blame for not being on our side.

Anthony says:
24 February 2014

I am angry with o2 and their parent company, telefonica for raising prices second time within 18 months.

Would I be able to cancel my contract as the advisor never informed me about any forthcoming price increase when i upgrade my phone on 21/12/13 at the carphone warehouse?

TonyF says:
24 February 2014

Hi Anthony,
I wrote to Telefonica to that effect on Saturday because I never saw nor signed any contract with such terms + conditions from O2. We were transferred involuntarily by O2 to a company (subsidiary?) called Azzurri to sort out our phone contracts, and we only agreed by email to Azzurri’s offer which said nothing about putting prices up weeks after the agreement. I would never have accepted such terms. Azzurri’s correspondence is plastered with O2 logos and on the phone they call themselves O2.

I don’t think you need to think in terms of your cancelling the contract. It is Telefonica who is at fault because they changed the contract unilaterally. If anyone terminated the contract it is Telefonica when they revised the price in breach of the contract as entered into by you and agreed by your advisor acting as an authorised representative of O2.

I will report back when I hear from Telefonica. Meanwhile we shall be cancelling our direct debit authority in the second week of March and moving our business elsewhere.

Anthony says:
25 February 2014

Come on O2 and Telefonica why don’t you follow OFcom’s rule and cancel the price increase for all existing customers. You reportedly made over £700 million last year and there is possibility for more on the 27/02/14

S HARDY says:
8 March 2014

I’m disgusted with O2 for manipulating me into a contract that was blatantly misleading, and has for me created a total miss trust of all mobile networks now!!! I will definately not be be renewing with O2, instead I will be buying a unlocked handset and purchasing a sim card from GIFFGAFF! O2 has not done it’s industry any favours with the consumer, instead it has created a relationship of total mistrust!!!!!!

Dan Kinsman says:
20 March 2014

Success! It’s been a long old slog but I’ve just spoken with an O2 advisor on the phone and they have agreed to end my contract and waive the termination fees. I used the fact that I was promised call backs and that their complaints system was inadequate in dealing with issues as leverage.

I told them I was at material detriment as I use MMS (picture messages) and premium and local rate numbers all of which are outside the contract bundle. The price increase for these is a little over 14% putting them over their 10% clause.

I initially complained about a sudden drop in service at work and at home 4 months into the £36 to £39 contract and the Ombudsman came back with a half price line rental reduction offer of £19 per month which was a good start.

I then raised the separate complaint regarding material detriment with Online Advisors, time I’ll never get back. Finally today, I thought I’ll just try and call them and see what they say. I spoke with a UK advisor who was brilliant and within 10 minutes it was a done deal.

New sim only contract starting next week with T Mobile on the Orange/EE network. 12 months, unlimited texts, 1000 minutes and 3 GB data all for £10 per month. Stoked!

RandomCurve says:
5 April 2014

Lets be clear and honest here – O2 have not FOUND a loophole. Ofcom have deliberately CREATED a loophole!
Ofcom published their guidance on 23rd October 2013 – it was 92 pages long.
It said the new rules won’t apply for 3 months
I contact ofcom to ask why it needs 3 months – they responded
“To give companies time to adjust their T&Cs” – I queried why companies would need to adjust their T&Cs, but no response was forth coming
Then on 23 January – the day the ne rules came into force Ofcom published a REVISED edition of the guidance (without calling it “revised”) – this time it was 95 pages long AND the extra pages contained examples which EXACTLTY mirror O2s new T&Cs as to examples where prices CAN BE INCREASED MID-TERM.
So your anger needs to be directed at OFCOM who clearly have tried to con us all by pretending to have banned mid term price hikes – disgraceful!