18 October 2012 / Money, Technology

Is the end nigh for surprise mobile price hikes?

Piers Claughton Campaigns officer

Comments 14

Is Ofcom about to call time on communication providers that raise prices on fixed contracts? Today the regulator announced its plan for a consultation into protecting consumers from surprise price hikes.

Ofcom’s announcement highlights that this came about due to your complaints about price rises on fixed contracts.

It’s good news that the consultation, which is planned to take place before the end of the year, will be looking at hidden price variation terms for all communications providers, including landline, broadband and mobiles.

My personal interest, however, is on mobile phones, having been a victim of Vodafone’s recent 2.4% increase. It was comforting to know from reading previous Conversations that I’m not the only one frustrated and annoyed by these unwelcome and unexpected price hikes.

Over the past year, four of the five main mobile operators (Orange, T-Mobile, Vodafone and Three) have outraged customers by imposing price increases on fixed mobile contracts. Like so many others, I was annoyed that after being dazzled by advertisements boasting the deal’s cheap price, the ability to raise prices was buried in the small print.

Ofcom must act swiftly

We’ve got this far because you’ve spoken up here on Which? Conversation or have been one of the 32,000 who’ve signed our Fixed Means Fixed campaign. And I think it will take your voice to get the right result from the consultation. At Which? we think that mobile providers should be made to drop hidden clauses that allow them to hit consumers with millions of pounds worth of surprise price hikes.

Ofcom’s consultation is a great opportunity to highlight the true level of dissatisfaction with the current situation. Therefore, as a fellow frustrated consumer, I would encourage you to share your thoughts with us – do you think fixed should mean fixed?

Comments

frugal ways says:

18 October 2012

Let’s start with some FACTS here which?

* Ofcom are misleading consumers when they state they started an investigation into this issue in May 2011 – their review which covered this issue as well as others, started in January 2012 and was to be reported on/action taken, by July 2012.

* Ofcom and which? did not inform both callers to ofcom and posters to the various threads set up on which? conversation that this review was taking place, until AFTER both which? and ofcom announced spoke of an extended review, or to put it in plain english, a delay of the findings of the review until January 2013 at the earliest.
Ofcom, it was reported by visitors to this website, posted that the stock answer of “it’s down to the individual to proove detriment” was given, followed with “complain to your mobile phone company directly, or try the ombudsman”. Which? repeated this in it’s replies.
This suggests that ofcom had no intention of acting on this issue after it’s investigations, as mobile companies were consulted during ofcom’s revue, so would have been fully aware of any non action to come, so went ahead and used their small print/undisclosed contracts.
It could also have been an ofcom trade off with mobile companies, as another poster to which? has stated, with the costly bidding of 4G coming up in January 2013, which coincides nicely with the extended review by ofcom.
This also fits in with which? choosing not to force ofcom’s hand into responding to a super complaint (90 days would have seen a result by October 2012) and instead issuing a formal complaint of exactly the same nature and ignoring consumers on why they chose this course of action.

* July 2012 which? stated that they had submitted a “formal complaint” to ofcom as urgency was needed to sort out this issue.
When questioned as to why a “super complaint” was not submitted, as is within which?’s powers and would have given ofcom 90 days in which to respond, Which? stated that speed was of the essence and a super complaint would have been time consuming to put together, therefore delayting the process further.
FACT: Everything submitted by Which? to ofcom in their formal complaint, was exactly the same information that is required of a “super complaint”
When asked for the difference of criteria between a formal and a super complaint submission, which? ignored the question and have not answered.
For which? to act in this manner, on what it has claimed to be THE most posted on issue, is bizarre!

* FACT: Ofcom do not act upon individual’s complaints.
The reason for delaying their findings/action for a further 6 months – from July 2012 to January 2013 at the earliest – is down to which? submitting their “formal complaint” alongside their marketing campaign “fixed means fixed”
The coincidence of ofcom’s delay and the launching of which? fixed means fixed campaign, suggests that which? were well aware of what was happening at ofcom and used the opportunity to gain more coverage in the media and internet, in effect, a marketing exercise.

* Timeline:
July 2012 – ofcom to reveal review findings/action, until which? submitted a formal complaint (to much fanfare in the media) – ofcom announce they will now delay their findings/action until January 2013.
October 2012 – had which? submitted a “super complaint” this would have forced ofcom to reveal it’s findings/action this month – all which? have said on the issue is that they expect ofcom to deal with this issue well before the January 2013 review extension following their formal complaint.

Ofcom have now announced that they will be setting up “a 3 month consultation process” that conveniently stops nothing with the mobile phone companies (whom are breaking the law!) and allows them to continue to sell contracts as “fixed” prices until January 2013 at the earliest, when the expensive bidding for 4G starts.

Ofcom, which? and mobile phone companies have all been in speaking to each other, but consumers are not allowed to see any notes relating to this. Why not?
Ofcom, which? and mobile phone companies have all been complicit in deceiving (strong word but appropriate) consumers.

How which? have the sheer cheek to now post;
“Ofcom must act swiftly

Ofcom’s announcement is definitely a big step in the right direction, but it’s now absolutely essential that this consultation is carried out swiftly and that it results in something that genuinely protects you and me from these unfair rises.
We’ve got this far because you’ve spoken up here on Which? Conversation or have been one of the 32,000 who’ve signed our Fixed Means Fixed campaign. And I think it will take your voice to get the right result from the consultation.”
is beyond me!

If which? wanted it dealt with urgently, why not submit a super complaint?

I close with a psychic prediction….
– Ofcom will find in 2013 that it is no longer acceptable to sell fixed contracts on mobile phones without the *disclaimer showing that prices can be increased by RPI during the term of the contract. If this is not stated on mobile company’s advertising then the consumer will be able to complain to ombudsman and get out of their contract without penalty.
– Which? will claim a “victory for the consumer” demonstrated by the ofcom’s findings/actions. This will be plastered all over the media and online.
– Mobile phone companies will then use all the millions raised to assist in their bids for 4G

This whole issue has shown, to me anyways, that which? are no longer fit to be trusted with the power of issuing a “super complaint” or called a consumer body.
We always knew ofcom (and other regulators) were too close to big businesses, but for a consumer body to be in bed with the same regulator is a disgrace.
Which? you can never claim to be “independant” again!

frugal ways says:

18 October 2012

Strange one, ofcom’s statement is not a step forward – which? already knew that there would have to be a “consultation” process – as this is the law.
I wonder why which? have not mentioned this in all their responses on this issue, especially when they submitted a “formal complaint” instead of a “super complaint” with a 90 day time limit?

Interesting to note that when I put it directly to which? and ofcom, via twitter, that they were delaying the process, not once have which? or ofcom denied this is the case, or given evidence to suggest otherwise!
With this in mind, how can either ofcom or which? claim to be “independant”?
Both have admitted they are in discussions with mobile phone contract providers….

Patrick Steen says:

18 October 2012

Hello Frugal, we’ve talked about this before – we launched the campaign because we saw real consumer detriment in the comments made.

You have a number of misconceptions about the processes involved. We didn’t issue a super complaint as it requires more time to put together. Plus, a super complaint doesn’t mean the regulator has to issue a result within 90 days, it means the regulator must respond with a plan of action in 90 days – this is what Ofcom’s done, showing that it has treated our formal complaint as if it was a super one.

Under Communications Act 2003 Ofcom must publish a notification if they plan to modify or revoke a condition and ‘specify the period within which representations may be made to OFCOM about their proposal’ . We want to see quick action as much as you do, and have done our best to achieve that. Thanks.

frugal ways says:

18 October 2012

Hi Patrick,
I could go down the same old road, of asking you a selection of questions showing evidence of your posts on these boards as proof, but to be honest, it wouldn’t do any good.
Which? refuse to answer my direct questions, instead point to vague factors that do not provide an answer to what was asked and at times, have been nothing short of irrelevant to what has been asked.
This is systematic of the world of marketing we live in today, of which you are a paid servant of.

The sad fact is, we have many many thousands of mobile phone contract holders today, that are left with no protection from governments of any colour, that play up to business.
The people of the UK are given the impression that their interests are being looked out for by a regulator that is equally evasive, proclaiming to be spending a taxpayer funded budget of millions each year, on helping the very people that pay their wages. All this while having absolutely no grasp of what is really happening, whatsoever.

There was once such thing as a truly “independant” body that would fight the customer’s corner and take on all forms of unfairness, regardless of being a business, a regulator or a government minister. Which? used to be one such body.
Goverments, regulators, consumer groups, etc, all claim the moral high ground, it is always the individual consumer that is guilty of misconception and never those that have played a pivotal role in where the consumer has been dumped right in it.

In this instance, we have mobile phone companies that hold sway over their own regulator (an all too common occurance across every industry these days) in that they are “working together for the benefit of customers,” which is of course utter nonsense.
Now we have a consumer group, which? that are clearly more concerned with “managing” a situation alongside said regulator, to afraid to stand up to it.

Customers are left facing increased bills, many have paid money to get out of contracts (unenforceable under common law) to avoid increases only to find that the next 4G bidding mobile company has done exactly the same thing.
What which? and ofcom fail to grasp in all this, is that while you are marketing, releasing statements, setting up campaigns to increase your popularity, you are fast becoming less relevant.

You could have any number of test cases to take forward, where a consumer has been sold a contract and not had the RPI increase pointed out at the point of sale – both which? and ofcom have shown neither the foresight or the inclination to even attempt it. To put your necks out for the very consumers you use portray to exist on behalf of.

My conscience is clear, I haven’t given up any principles as which? have done in siding with an industry dominated regulator.
If there is one thing I cannot abide, it is misleading people.
I can see through all the marketing spin about what which? is guilty of on this issue with ofcom.
Others choose not to as is their right, but taking shortcuts to popularity instead of following your principles will only weaken which? in the future.

Which? should have strived to fight a test case for consumers or voiced opposition to the spin the regulator is feeding people, but your marketing strategy and need to strengthen your position in the eyes of the public, has left you compromised.
As a consumer group, which? no longer holds my respect.

william says:

18 October 2012

Simple answer No. Don’t forget its Ofcom that allowed them to hike prices on “Fixed” contracts in the first place. So I can’t see them changing much, maybe reducing the number of increases to one per contract.

I’d rather see the word FIXED being banned for anything but a fixed term/price contract, otherwise they should be forced to switch to using VARIABLE which is what it is.

wavechange says:

18 October 2012

I’ve suggested the term VARIABLE PRICE CONTRACTS several times on Conversations. It would alert people to the possibility of price rises during the contract. But longer term, contracts need to be fixed price, without exception. I don’t care about mobile phones but I’m concerned that the practice of increasing prices during contracts could become more widespread.

Good luck to Which with the Fixed Means Fixed campaign. I’m fed up with all the discussion about phones. 🙂

william says:

19 October 2012

@Wavechange, where do you think I got the idea from 🙂 It is after all a very sensible one.

wavechange says:

20 October 2012

I’m not sure if it was my idea, William. I’m a great believer in recycling ideas, whoever thought of them. As you imply Ofcom has a lot to answer for.

If O2 would say that they have not increased their prices during contracts and make a commitment not to do so, they could pick up plenty of people who are not very happy.

Matt says:

7 November 2012

“If O2 would say that they have not increased their prices during contracts and make a commitment not to do so, they could pick up plenty of people who are not very happy. ”

They can promise all they like but they still have the clause in the contract to say that they can do it.

richard says:

7 November 2012

I have had a hike in my charges for my phone, have a reasonable signal at home although its not 3G
and a poor signal at my place of work, the wife and kids have given up trying to get me now , I’m on vodaphone and they’re people have even addmitted that there is apoor signal in my location of work does this count for a good case for termination of contract

Christine Phillips says:

10 March 2013

Ever since I was connected to Orange in July last year with my new phone contract, I have had nothing but problems with my phone. No connection whist at work even though others are connected, no service at other times, wrong billing, and now to top it all an increase in my monthly payment! The customer service in my local Orange EE store is poor and I regret signing up to this contract. I am incenced to think they can increase my tariff when I am on a fixed 2 yr contract! I am now looking to buy out my contract with them and return to O2 who I had for 10 years with no problems.

fordy says:

4 July 2013

So when are we going to hear anything more about the sanctions imposed by OFCOM on the mobile phone providers/any response at all!!!

This has desended into farce, most people effected probably are or very soon to be, out of contract anyway.

It should of been a super complaint, action insisted upon immediately & to be left hanging indefinately with no updates as to what is keeping us waiting for further information is the final insult.

Could someone please ask OFCOM when we are going to get closure on this issue or/and when are we going to get any more information at all. It said 3 months, it’s 4 now?

Fordy says:

5 July 2013

So I get a reply stating ‘end of summer’. Does that include any indian summer we may get……..

Christina says:

11 September 2013

It seems to me that it’s one rule for the customers and one for the mobile phone companies.
If people leave because they want out, they are breaking their contract with the provider, but if they put their prices up, then surely they are breaking their contract!
This is one reason that I won’t take on a contract phone, but my family have contract phones and I feel this is unfair on them as regular mobile phone users.

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