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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?

Comments
Marcus Clarke says:
31 January 2014

I am a long standing 02 customer, I took out a new phone contract in December an upgrade where no warning was given that price would go up. In fact when I asked about I was told it was a fixed plan but I have now had a email saying price going up not a happy person 🙁

Fiona Hunt-Taylor says:
5 February 2014

EXACTLY the same has happened to me, and at the same time, too: not only this, but they persuaded me to switch to o2 Business Internet from regular o2 (now Sky?). This has been running at slightly under 1meg!! When I rang about it, they told me that this has been the case since December 13: roughly the date I renewed our contract and added our home telephone and broadband to our o2 Business account. At the time I felt very happy, but just last week came this letter about an increase, trying to soothe by saying it was minimal! That is hardly the point!! I, too, am not a happy person either! 🙁

Nige Wager says:
31 January 2014

I changed from 3 to O2 in October with Carphone warehouse. I was not told about price rises but I got an e-mail this week telling me my tariff was going up.

Steve says:
31 January 2014

I’ve just received information from T Mobile changing their T&Cs to allow them to put up their contract prices at or below RPI without any penalty to them. Only if the price increase exceeds RPI can the customer, i.e. me, cancel the contract mid contract without any charges. They haven’t announced any increase in the charges but I’m sure it’s just a matter of time. So we see that Fixed does not mean Fixed. Just seems as were right back to square one.

Martin Garside says:
31 January 2014

O 2 are bandits. On top of the price increase that as far as I am concerned is theft. I purchased an IPhone 5 only to find out that O2 will not support this phone on 4G I need to buy my contract at a knock down price of £224 and take out another contract at £42 for an IPhone 5s. Guess what I will not be doing yes buying the last year of my contract out and taking a new contract out with this bunch of cowboys. I will hold on and move to 3 when my time is up with O2.

O2 are within the law until the most creative lawyer in the land has exhausted every angle to prove otherwise and I don’t think they have yet.

A far as I am concerned there must be a Mr Loophole lawyer who can do something about this. If a footballer can get off a speeding fine, there must be a way to screw O2 as well. No disrespect to Which’s efforts but they are probably bound by all sorts of politics. Some kind of entrepreneurial lawyer is required here, who isn’t bound by potential stumbling blocks that Which may have. Where there is a will there is a way, simple as that! Look at all those companies chasing the PPI payouts, someone should be following a similar legal challenge to that!

I have complained to the advertising standards authority via their website, the conversation I had with them was a little pointless however.

I work in marketing and from a legal point of view I can’t see how it is legal to advertise one price on the initial sales page to entice customers and them change the goal posts on click through.

I understand websites tell you more during the click through process but this is an English language issue in the first instance. It clearly states on the initial sales page that it is for example 24 months and £25 per month. At no point in this communication does it state in brackets or otherwise that you may not pay this for 24 months. The individual web page is a clear misrepresentation of the product and as such this falls within the Misrepresentation Act 1967. This exists to protect consumers from false or fraudulent claims that induce you into buying something, or entering into a contract and allows you to claim damages in the case of fraudulent misrepresentation. If it doesn’t then I need to do my GCSE English again!

I’ll give you a retail example to highlight my point. If you put the wrong price on the shelf in a shop and the price turns out to be higher at the check out than was advertised on the shelf the shop should honour the price on the shelf. Having worked in this sector before, invariably the shop agrees to the shelf price because they know that the customer has a case. Please tell me why a web page is different to a shelf in this instance?

The government should be doing more but I wonder why they aren’t cracking down on the telecommunications industry? Perhaps it’s because a lack of regulations for these kind of issues conveniently helps the economic growth of this country while really damaging the prosperity of hard working consumers. How many other industries are they allowing such unethical practices in the pursuit of spurious economic growth? Thanks for the spin Osborne but I ain’t no sucka!

Make sure you keep O2’s complaints department busy. At the very least we should look for ways to increase their costs and admin.

piperdog123@gmail.com says:
31 January 2014

Just to follow up on one point in your post.

You Go into a shop and the item is displayed at a price. You get to the checkout and it is higher. The law is VERY CLEAR on this. The retailer is under NO obligation to sell at that price. In practice most retailers do so for goodwill and accept their mistake but that is NOT a legal right.

Of course by advertising the item at the lower price on the shelf ticket the retailer can be prosecuted by Trading Standards.

Again when posting on here incorrect posts help no one so please check facts first.

Roy Edwards says:
1 February 2014

Yes, but you then have the choice to walk away from the checkout! With O2 they just rob you!

Tony Faulkner says:
31 January 2014

We signed a new 24 month small business contract for two phones in November and received notification a few days ago to say they were reneging on the agreed figures.

These are bad people. If they get away with it, you can be sure the other majors will follow suit. That is how the so-called free market works in this country: corporates make it a sport to find their way round the law and around paying taxes by spending fortunes on lawyers looking for holes in the net.

Roy Edwards says:
31 January 2014

I took out a 24 month contract with them mid December 2012 at a rate of £36 pcm. They confirmed this contract by letter.
But they have never charged me less than £37.15 cpm, which reflected an increase imposed January 2013, but which they did not notify me of. I contacted them upon receipt of their latest increase and have informed them that I consider that their contract was void because they have never once charged the agreed rate, and that I will be terminating my d/d instruction.
Just want to make alternate arrangements first.
But O2 will never see a penny from me again.

I was notified of the 2013 increase, but never ever received T&Cs. I was complaining about this when the new price increases came through. I’m now doubly angry.

I knew Piper Dog would have something to say. Let me just clarify the law with you if I may. If the law is so clear on certain issues as you suggest why do footballers get off on speeding offences? Is that because laws are there to be challenged and are not clear? I suggest to you that they are the opposite of translucent! I wonder if it is because the lawyer spotted an error in the how the Police handled the case and jumped on it?

Your interpretation of the law maybe such that retailers offer goodwill, but my interpretation is that they offer that as a strategic decision to protect themselves if indeed someone did decide to pursue them. Your take on the law is merely an interpretation sorry, like I said in my original post the most creative lawyer will attack such communications from whatever angle necessary.

Questions, questions, questions and creativity my dear fellow not ignorant interpretations of the law please!

In this O2 debacle there is no creative lawyer because us normal folk can’t afford one!

Now jog on with your overly competitive comments please!

piperdog123 says:
1 February 2014

Argh Jim

Thank you for your ill advised comments.

FYI I have studied Consumer Law. The issue of prices on display is known as “invitation to treat” and has been part of Consumer Law for many years. More recently we have seen examples like Argos mispricing items on their website and cancelling orders when spotted.

The law is abundently clear on this. It is NOT my interpretation.

In reality for smaller items like groceries retailers as a gesture of goodwill are likely to accept their pricing error and give you goods at lower price. But you try going into a supermarket, seeing an incorrect price and the picking up 100 or more of the item. They will say no.

I am just being balanced here. O2 are inside the law here. I checked my own t&c’s and it is there. Like almost everyone else I don’t like it and I agree fixed should be fixed. But the issue here is OFCOM. They screwed up the rules. O2 are living inside them even if it is perceived by me and many others as morally wrong.

You don’t have to agree on the legal argument Jim and I don’t really care either way. I have studied it. Ask a lawyer then come back and confirm to the world I was right.

If you want a logical argument pal you picked the right bloke so bring it on, I shall proceed and compete appropriately!

I reiterate my point, the law is not clear at all and it doesn’t matter how many times you want to use capital letters I will reply.

Every lawyer will interpret things in different ways. The useless lawyers will be lazy and fail to find regulations to battle this, creative lawyers will get on with it! I shall reiterate again, us normal folk can’t afford these creative lawyers!

Go get your legal book out and tell me how footballers get off speeding fines and how an American woman was acquitted, but then found guilty again the other day. I would suggest that in both examples the law might have stated xyz but the lawyers knew how to fight the cases right. I think in laymen’s this is referred to as challenging the English language in its most basic form and this is what us consumers want in this case!

Thanks for your other point on the Ombudsman, that is precisely the type of communication us normal folk want.

[This comment has edited to adhere to our community guidelines. Thanks, mods.]

Hi, we love to have a healthy debate but please can I remind you of our commenting guidelines https://conversation.which.co.uk/commenting-guidelines/ – please be respectful of other commenters and do not make personal comments.

Elizabeth Bell says:
31 January 2014

I changed my pay monthly contract in March 2013 when I upgraded my phone. I was not told that the price might change during my 24 month contract. Yet I got a text on 28/1/14 saying price would rise 2.7%. Not happy but what can I do?

You can raise a complaint with Advertising standards, but I found them to unhelpful and would not explain any details. Worth doing though as this case is about the volume of complaints. Here’s the link http://www.asa.org.uk/Consumers/How-to-complain.aspx. Complaint to them is about Misrepresentation of the advertising. For example their web pages prior to explaining the rpi clause.

Also complain directly to O2, here is the link http://service.o2.co.uk/IQ/srvs/cgi-bin/webcgi.exe?New,KB=Companion,question=ref(user):str(RelatedHelp),CASE=46943

Push O2 hard on the material detriment grievance, more details on this through Ofcom who you can also complain to. Push O2 hard enough with the right communications and it could go to the ombudsmen, but this won’t happen unless you throw very strong communications at O2. Have a Google and look at how other people have argued material detriment, this may help your case and it’s particulars.

I called Ofcom to complain and got some guidance too but sure you can complain online too.

Sitting back and saying Oh well is not an option with this case, it sets the most horrid of precedents for us all and must be stopped!

piperdog123 says:
1 February 2014

Jim

You might be interested to know that each time a consumer sends a case to the Ombudsman Service it costs o2 £300. If enough people do it o2 will most likely be seen for what they are.

The correct process for unhappy o2 customers is as follows:

1. Call o2 customer services on 202 (free from o2 mobile). CS will follow corporate line about the increase but you must complete this step. Once CS have said no. …..

2. Send complaint via email to complaintreviewservice@o2.com providing full details of why you feel the price increase shouldn’t apply (lots of guidance on here). Again you MUST go through this process. The CRS will of course toe the corporate line. Once CRS have given you the final answer you are entitled to a “DEADLOCK” notice (or letter).

3. Once you have the holy grail (deadlock letter) you are then free to go to the Ombudsman Service. And that will cost o2 £300 WHATEVER THE OUTCOME.

If enough of you do it then who knows o2 might have to climb down OR OFCOM might have to get involved again.

Good luck everyone

Kenny says:
1 February 2014

I tried to call O2 as you suggested but I wasn’t able to get through, as their agents was busy – I guess dealing with the volumes of complaints. Funny thing is they did mention that if you’re calling regarding the recent price increase you can get more information on their website. I guess this a tactic to deter people from going through the process you mention which will cost them money when it goes to the ombudsman. This the second time that my wife and I have been hit by an increase in our monthly contracts in less than two years. If I get no joy in getting through to customer service then I’ll have to take my custom else where when my contract is up in September but that’s a long time to wait. I’m not very happy.

piperdog123 says:
3 February 2014

@Kenny

Indeed o2’s phone lines are very busy but only if you are trying to get through to cancellations (aka retentions). Funny that eh?

If you want to speed the call up ring o2 on 202. At the first message about which department select one then at each menu select 0. I have used this several times in the last fortnight and got an agent inside 5 minutes. Explain your call that you want to leave and ask them to put you through to retentions. They don’t queue like you and I do. And you get through much quicker.

Good luck. I hope you get your desired outcome. I know they won’t remove the price increase but you may get another offer or something added to your account.

I too was angered by he price increase email from O2. I thought that I had a two year fixed tariff. But it prompted me to look at my actual calls and data usage and I reduced my Data Bolt On to a lower level, thereby saving £3 p.m. So one can use the “Fixed is Not Fixed” in the opposite direction! Made me feel good. But I will switch away from O2 at the end of my two years, as a matter of principle.

Simon Cheshire says:
1 February 2014

This is the second time my sim only contract has increased in 16 months. The first time was after just 3 months. When I contacted O2 to question it they said they were allowed to increase the line rental once every year providing it didn’t exceed 20% of your bill. This time following Which advice to email O2, I phoned them for the PAC code to leave & take my number with me they gave it me without a fight. By switching I have reduced my monthly tariff by 53%. If every customer switched from O2 sending them into liquidation there will be an end to this. As all the other companies would be afraid it’ll be them next. We should do the same with energy companies next.

Jennifer, Kent says:
1 February 2014

My two year contract has just finished, so I will be changing provider, as the service has never been good, and the unannounced price hikes are a disgrace.

Michael says:
1 February 2014

As another comment has noted, increases in line with RPI can only become known after the event. This mean that it is again impossible for the consumer to know what they are signing up to. That is the opposite of what Ofcom’s new rules were intended to achieve. Add to that the fact that pay and pensions are more often linked to CPI, which tends to be lower than RPI and we have a recipe for phone charges steadily increasing relative to income. The fact that increases in charges are now tied to an index does not make them more acceptable. If energy companies can fix their charges for set periods why can’t O2?

alex says:
1 February 2014

I am a long standing O2 customer with two pay monthly contracts. Imagine my surprise that a day before OFCOM announced the new policy O2 emailed me saying they were hiking up the price of both contracts. Sharpe practice if there ever was and I for one shall not be quick to renew my contracts with them.

Which are out of order with this campaign. They have made an opportunity for telco’s to review their pricing with the regulator and the result is a formalisation of price rises. Before the campaign the telco’s generally respected the fact that the price paid at the start of the contract would roll on until you upgraded even though their T&Cs allowed them to increase prices at least once per year. Now, Telefonica have decided to use the opportunity presented to them by Which. I am sure the others will follow them and who could blame them.

I also notice that Which have a clause in section 2 of their T&Cs allowing them to change the price of their subscription whenever they like, and by not mentioning on what any increase they would base their increase, by any amount. How hypocritical.

Duncan Riddell says:
1 February 2014

Been with O2 it seems forever but will definitely not be coming back as they are using tricks to crush customers.

Only way for O2 to listen is to stop buying from them…. at next opportunity get OUT.

Caroline says:
2 February 2014

Ive been a long term customer of o2 and never had any complaints however this is the 2nd mid contract price rise and i WILL be leaving o2 in June when my contract is up….not happy 🙁

I had an annual contract with O2 which expired in early January. I went and upgraded my phone and got a 2 year contract for £27.00 a month. 2 weeks later, the price goes up!
O2, when the contract expires, you will have lost a loyal customer, I will not forget this!

Tony says:
2 February 2014

Our O2 business contract charges were notified to us by and signed off by Azzurri in November and I knew nothing of the planned increase by O2 which is ridiculous. According to the legal advice I received we have grounds to go after Azzurri for misselling, let alone going after O2 for this ripoff.
I’ll know more on Tuesday most probably.
Whoever signed O2’s decision off to go ahead with this increase must be expecting deservedly to lose his/her job for the damage it has caused their reputation and good will. O2 should back down now before more damage is done. They will end up losing many accounts and will also end up inevitably in court. These contracts are big business and very competitive, and O2 is handing over millions of pounds worth of business to hungry competitors.