/ Technology

Hit by a mobile price hike? Want to exit without penalty?

Cartoon of happy phone

After more than 2,000 comments and 38,000 pledges on our Fixed Means Fixed campaign, Ofcom’s launched a consultation on how to tackle price hikes on fixed contracts. We still need your support to get the right result.

If you’re a Which? Convo regular, I’m sure you’re aware of all the mobile phone price rises we’ve had to suffer over the past couple of years.

O2 was the last to jump on the price rise bandwagon, with Vodafone, Orange, T-Mobile and Three Mobile hiking their prices beforehand. It’s a practice that will see their customers collectively paying almost £150m extra per year.

Following our Fixed Means Fixed campaign, Ofcom has now launched a consultation on how to protect you and me from such mid-contract price rises. And mobile phone contracts aren’t the only deals on the table; broadband and landline deals are also included in the consultation.

What does Ofcom’s consultation propose?

Ofcom concludes that its current rules are not operating effectively as they don’t meet our expectations that the price of a contract should be fixed. Instead, these rules are leaving consumers exposed to surprise price rises, without offering the ability to avoid them.

Ofcom’s preferred solution is to let customers leave their contracts without penalty if prices go up. At the moment, you’re locked into your mobile deal if prices rise. But how are you locked in? Because exiting requires you to pay a hefty fee – usually the remaining payments on your contract. And that’s no small change – if you’re not too far into a two-year deal, the remainder of your contract will run well into the hundreds of pounds. How exactly can you vote with your feet if you’re forced to pay a hefty fee to move to another provider?

Ultimately, fixed contracts should be at a fixed price. But if providers don’t want to stick to that, you should be able to say ‘sayonara’ and leave without penalty. That would put the power back in your hands – you’ll have the freedom to switch and take advantage of the best deals.

Help us achieve the right solution

However, Ofcom has also put forward other potential solutions. These include issuing further guidance for mobile providers, ‘opt-ins’ for variable price contracts or even maintaining the status quo – an option I’m sure the providers would welcome with open arms.

At Which? we want to see Ofcom act upon its consultation without delay and make the right decision. Not only should you be able to cancel without charge if prices go up, Ofcom must ensure providers tell you about this right before you sign on the dotted line. No more surprises.

So, that’s what we think about Ofcom’s consultation here at Which?, but we still need your help to achieve the right solution. Ofcom’s consultation lasts 10 weeks, so there’s plenty of time to tell the regulator what you think, either by responding on Ofcom’s website or by commenting below. We’ll feed your comments into the consultation to make sure no views go unheard.

Do you think you should be able to exit your contract without penalty if providers put your prices up mid-contract?

[UPDATE 7 March 2013] – There’s just one week to go before Ofcom closes its consultation into price rises during fixed contracts. Have your say by voting in our poll and watch our new Fixed Means Fixed video:

Comments
Guest
Durr says:
13 March 2013

What gets me is that I pay £36 or £37 a month now (can’t remember exactly) for my Three contract, yet I walk past their store the other day and see the same contract for £34 a month. It has the same iphone (though the new iphone 5, not 4s) storage wise and same exact contract.

Guest

Doesn’t make sense does it.

Guest
Durr says:
13 March 2013

I think they charging the existing customers more to cover the 4G auction and to make prices lower for new contracts to suck people in. Then after 6 months or so they whack on a price rise and keep you locked in. It’s got to stop and ofcom need to be firm with this. Thanks to which for getting ofcom to at least take a look.

Guest
pmunc6 says:
13 March 2013

Hi Patrick,
It has been my pleasure to contribute to this campaign, it is time that consumers were given an opportunity to voice their opinion on these underhanded tactics.
You mention that there is only one day to go, do you think we will get a decision this quickly or will we have to wait until June.
You may have read that I cancelled my contract with O2 and that they sent me a bill to cover the 22 months left on my contract, I have responded advising them that I will reveiw the situation after the decision has been made by Ofcom and will not be making any futher payments until that time. I expect the heavies to call on me sometime soon so fingers crossed for that!

Guest
lin lobb says:
13 March 2013

Wonder what the Small Claims Court would make of all this?

Guest

Wonder if Which would either take this to court or guide anyone brave enough through the small claims court process?

From the Which video, I would have liked to see another option 5: Mobile Providers are just banned from raising their price. If they wanted to increase their income then give their new contractees a contract that is a bit more expensive.

Guest
robb says:
5 April 2013

haven’t checked, but there is aparently a warning in the small print of the contract about price variations, which means the courts can do nothing, as it is in the contract. however, i wonder if the monopolies commission may be interested, as it does mean that for 2 years you can’t switch to a competitor, without paying out a load of money.

Guest
Billymac10 says:
22 March 2013

I completed the OFCOM survey some time ago and found it interesting that one of their questions asked whether OFCOM should provide guidance as to when prices can be increased. It turns out that the existing get out clauses providers have to increase prices (inflation/materiality) were given to providers by OFCOM as earlier guidance. I wasnt aware of this before, as until this happened providers never increased their contract prices (I have had various contracts since 1996). OFCOM seem to have created ths mess themselves…….I hope the next guidance is to let us get out without a charge if prices are increased. I work in Financial Services and in my industry price increases like these mid term would be a major scandal.

Next step for OFCOM is to stop the likes of sky and virgin bundling their services so that if you don’t want a fixed line telephone, the price of their stand alone broaband goes up by nearly the same amount as if you did take a fixed line contract

Guest
Steve Porter says:
4 April 2013

I would love it if a fixed contract was actually a fixed contract.

Funny.. at the start the guy who sold me the contract (T-Mobile) assured me it was fixed monthly fee and that there wouldn’t be any price rises. (Lying ********)

Is this the main reason why they tie you in to a 24 month contract… so they can just boost the price half way through and leave you with relatively no choice but to carry on with the contract with the higher price.

It’s awful really. Even though I know it’s not just T-Mobile (it’s the majority), I will not be staying with T-Mobile at the end of my contract, unless they give me a great *FIXED RATE* contract 🙂