/ 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
pmunc6 says:
4 July 2013

I took out my contract at my local branch of Phones4You. I had come to the end of an 18 mth contract with 3 who had put my montly charge up just over a year into the contract so, as I was not happy with that, I decided to go with O2 but only after asking the rep, at several stages during my visit, if the price was set for the complete 2 years of my contract and was satisfied when he assured me that it was. Imagine my horror when, after 6 weeks into the 2 years, I rec’d a text advising me of the proposed incresse. I immediately went back to the shop where the rep was surprised that I had received this notice, he said they had no knowledge of such an increase. He telephoned O2 in my presence and became quite irate with the supervisor he finally got to speak to as he felt, their inability to advise he and his colleagues of the proposed increases left him in a situation where it would appear they had enforced him to lie to me and others asking him the question. I also spoke to the O2 rep at that time and told him I was cancelling my DD and would be taking the matter to Ofcom, he more or less said “good luck with that”, not impressed. I, like others on this forum, am outraged and will not pay them another penny, they can threathen me with whatever sanctions they like.

pmunc6,

Phones4You are not o2, they do not set or regulate 02 Terms and Conditions or Service Agreements. They are merely a shopfront / conduit for o2.

If you adopt the attitude that you “will not pay them another penny” then I’m afraid that they will, in all probability, “trash” your credit file for six years if you default on your contact.

Despite what other posters might allege regarding RPI the fact of the matter is that the recent price increase in December 2012 purportedly in line with the alleged RPI rate at the date it was announced was a breach of 02s own terms and conditions. At the time of the announcement of the price increase (early to mid December for most customers) they quoted 3.2% as the then rate of RPI – it wasn’t. 3.2% was the RPI rate in October 2012, up from 2.6 per cent in September. That information was published on November 13th 2012. The November rate of RPI (published on December 13th) was 3.0%. The December rate ie. the time 02 were writing to customers alleging it to be 3.2% was actually 3.1% so 02 had contravened / breached their own terms and conditions and opened the door for a mass exodus:

These fact are entirely verifiable via the Office of National Statistics (ONS) website.

Here is the particular term as extracted from the T&C’s as cached Dec 21st 2012:

(5.3 You can end this Agreement without having to pay the Monthly Subscription Charges up to the end of any Minimum Period you have left, if: (a) we increase your Monthly Subscription Charges by more than the Retail Price Index (RPI) annual inflation rate at the date we notify you of the applicable price increase;)

Key here is the term “at the date we notify you of the applicable price increase”. This is not the same as what it was amended to on April 6th 2013;

(5.3 You can end this Agreement without having to pay the Monthly Subscription Charges up to the end of any Minimum Period you have left, if: (a) we notify you of an increase to your Monthly Subscription Charges by more than the published Retail Price Index (RPI) annual inflation rate at the date we announce the applicable price increase;).

My earlier explanation as to the difference between the “actual” and “published” rates refers.

Anyone attempting to assert that a contract with 02 agreed through a third party is subject to or different from the Terms and Conditions and Service agreements as dictated by 02 is mistaken. If it were the case then why would they feel the need to supposedly advise 02 of their wish to cancel and not the third party?

All services provided by 02 (irrespective of any third party) are provided pursuant and subject to the Terms and Conditions / Services agreement as determined by 02. Those terms are variable and you agree to that fact when you agree to the contract by accepting the services whether you physically sign a contract or not.

Hi Mission accomplished,

Thank you for reposting what you have already posted several times.

For the avoidance of doubt there is nothing “factually misleading” contained in anything I have posted. Quite the opposite is the case. I have quoted from entirely verifiable public domain published sources (the o2 Terms and Conditions / Services agreement) and invited readers to visit the ONS (Office of National Statistics) site to verify the anomaly in relation to the rate of RPI / Published rate of RPI on the date that 02 customers were advised of their change to their contract terms. Ergo I will not be removing anything.

You contest that your alleged contract with 02 via Tesco is governed differently. It is not. Irrespective of what you allege your contract may or may not say all services provided by 02 (irrespective of any third party) are provided pursuant and subject to the Terms and Conditions / Services agreement as determined by 02. Those terms are variable and you agree to that fact when you agree to the contract.

Bully for you that you got out of your contract, well done.

The fact of the matter is that the recent price increase in line with the alleged RPI rate at the date it was announced was a breach of 02s own terms and conditions. At the time of the announcement of the price increase (early to mid December for most customers) they quoted 3.2% as the then rate of RPI – it wasn’t. 3.2% was the RPI rate in October 2012, up from 2.6 per cent in September. That information was published on November 13th 2012. The November rate of RPI (published on December 13th) was 3.0%. The December rate ie. the time 02 were writing to customers alleging it to be 3.2% was actually 3.1% so 02 had contravened / breached their own terms and conditions and opened the door for a mass exodus:

Here is the particular term as extracted from the T&C’s as cached Dec 21st 2012:

(5.3 You can end this Agreement without having to pay the Monthly Subscription Charges up to the end of any Minimum Period you have left, if: (a) we increase your Monthly Subscription Charges by more than the Retail Price Index (RPI) annual inflation rate at the date we notify you of the applicable price increase;)

Key here is the term “at the date we notify you of the applicable price increase”. This is not the same as what it was amended to on April 6th 2013;

(5.3 You can end this Agreement without having to pay the Monthly Subscription Charges up to the end of any Minimum Period you have left, if: (a) we notify you of an increase to your Monthly Subscription Charges by more than the published Retail Price Index (RPI) annual inflation rate at the date we announce the applicable price increase;).

My earlier explanation as to the difference between the “actual” and “published” rates refers.

If you think this information “helps nobody” that’s entirely up to you. I’m sure others will beg to differ.

Mission accomplished says:
5 July 2013

Dear Mr Angry,

This is kinda getting a bit silly now. When I say factually misleading, I’m referring to your claims that I have omitted terms in my contract such as 8.4(d) and all the terms regarding RPI.

Like other mobile retail outlets like Phones 4 U etc, the contracts they give you to sign come from the operators. They are not written and worded by the outlets themselves. Once again, the contract that I and many customers who signed to O2 via a Tesco Phone Shop retail outlet were genuine, O2 contracts, given to Tesco by O2. In fact, they weren’t even carbon copies, it was all done via O2’s contract system for Tesco, printed off and given to the customer to read and sign. It is that simple. This is a valid O2 contract and it clearly states:

“11. Changes to the Agreement
We may change this Agreement and the Charges at any time. If we increase the Charges for the elements of the Service you are using or change this Agreement to your disadvantage we will give you 30 days’ notice before the changes take place.”

How hard is it to understand that since O2 never advised that the contract had now changed, that my existing O2 contract is the only legally binding contract?

This is what I mean by factually incorrect and you are misleading those that have not been advised of a change to their contract at the time in question that all this RPI stuff applies.

Which was heavily involved in my case with regards to O2 and to the best of my knowledge, O2 has not exactly been forthcoming with a reasonable explanation, simply advising which that my contract was unique and nobody else has been given the same contract.

Please quit with telling me and everyone else that I’m deluding myself and the real reason O2 let me go was because of RPI, it wasn’t. Your anger and frustration is helping nobody while I’m doing my level best to help those who may be reading this and have such a contract. I cannot believe I’m the only one who has been given this O2 contract when signing to O2 via a Tesco store and infact, I already know this as Tesco were still being given that same contract by O2 until roughly March when it was finally fixed (for O2).

You do not know my and others situation, you have not seen our contracts, you are not in a position to comment on a contract you have never seen. Once again, terms used and finally accepted (after some battle) by O2, post in order with which they were used:

11. Changes to the Agreement
We may change this Agreement and the Charges at any time. If we increase the Charges for the elements of the Service you are using or change this Agreement to your disadvantage we will give you 30 days’ notice before the changes take place.

8.3 If this Agreement is ended during the Minimum Period, you must pay the monthly subscription charges up to the end of the Minimum Period. This does not apply if you end the Agreement for the reasons in paragraph 8.4.

8.4 You may end this Agreement at any time by giving us notice if:
(a) we break this Agreement in any way and we do not correct the situation within 7 days of your request;
(b) we go into liquidation or a Receiver is appointed over our assets; or
(c) we increase any of the Charges for the elements of the Service you are using or change this Agreement to your disadvantage. In this situation paragraph 8.3 will not apply.

My contract was exited on the basis of:
8.4(a) Failure to notify me of a change to my contract and failure to correct within 7 days.
8.4(c) Changes to my disadvantage with regards to the contract (RPI and numerous other terms) and the increase in price.

This is the reason O2 allowed me to leave and it took a manager just over a week to confirm I could hold O2 to the terms of my original contract which unlike you, she has seen and took up with O2’s legal team. Just think how many could be doing the same if it weren’t for posts like yours?

I wasn’t lucky, I simple have a good grasp of the law and the will to fight for what is right.
Don’t get ‘Angry’ get even 😉 You’ll thank me for it one day 🙂

Mission accomplished says:
5 July 2013

Hello Mr Angry,

I notice that you have reposted the above, despite the fact that Patrick has clearly responded explain my contract. Please allow me to explain the ‘Factually Incorrect’ parts of your posts that I take exception to and why I feel that the posts in question are misleading to others. I apologise if this is lengthy but I’m quoting you verbatim:

“You’re mistaken when you say “all this RPI rubbish does not apply to you”.

Factually incorrect: RPI terms do not exist in the O2 contract I signed.

“It applies to everyone currently on an O2 contract (whether physically signed or not) as it forms a main tenet of the Terms and Conditions of the services and contracts under which you are bound and under whicvh ypou may cancel without penalty.”

Factually Incorrect: The contract you originally signed is the one you’re legally bound by until such time you are notified of a change to said contract. How you exit and whether you can avoid penalties depends on the original contract. Ours was crystal clear:

11. Changes to the Agreement
We may change this Agreement and the Charges at any time. If we increase the Charges for the elements of the Service you are using or change this Agreement to your disadvantage we will give you 30 days’ notice before the changes take place.

8.4 You may end this Agreement at any time by giving us notice if:
(a) we break this Agreement in any way and we do not correct the situation within 7 days of your request;
(c) we increase any of the Charges for the elements of the Service you are using or change this Agreement to your disadvantage. In this situation paragraph 8.3 will not apply.

In our cases, contract and price changed to our disadvantage; 8.4(c) and never notified period of a change to the original contract 8.4(a) both valid reasons to leave without penalty according to the terms above.

“So, as you can see they have narrowed the scope of the charge increases and you cannot, as you allege, simply obviate your obligations as a result of a price increase unless it meets / falls within very specific (see: 5.3(a) & (b)) criteria.”

Factually Incorrect: Those terms do not exist in the contract we signed and we’ve been never notified either by email or in writing of a change of terms or contract.

“You have been fortunate but don’t assume your lucky escape had nothing to do with RPI”

Factually Incorrect: Assumption and speculation, NOT FACT in ANY form. “WHICH” on the other hand were fully aware of my case and in frequent contact with O2. They have a copy of my contract and I’m quite happy for them to share it with you. Unfortunately, much as I’d love to post it so you may confirm it is a genuine, O2 contract, I can’t because we’re not allowed to post links or contact details which is a shame because I reckon we both have the energy to fight and score for everyone who thought their contracts were fixed. I’ve never stopped, just can’t do this on my own.

“Here is 8.4(d)” which is the bit that Mission Accomplished omitted from his/her post which states:

8.4 You can end this Agreement by giving us Notice (in line with paragraph 19) if: (d) we change the terms of this Agreement to your significant disadvantage (which for the avoidance of doubt shall not include an increase in Charges for Additional Services, or an increase in Charges as set out in paragraphs 5.3 (a) and (b)).”

Factually Incorrect (and quite defamatory if I may say so!):

Nothing was omitted because the above never existed in the contract I personally signed. You cannot be held to a contract you’ve never seen, only the one you’ve been asked to read and sign at the outset.

These are the parts by which I refer to as ‘Factually Incorrect’.

With regards to RPI, I never said it was not important, it’s simply not important to those that do not have these terms in their contracts and have never been made aware as per the terms of their original contracts that O2 has new terms. While it may not apply to me and others, I think terms regarding RPI should be removed altogether. I’ve visited O2’s Head Office in Slough with a view to talking to the directors (worth a try 😉 Very nice place with a massive video sculpture in the main reception, it’s clear to see where all that money goes.

Now lets be nice and stop posting assumptions and speculation with regards to mine and others contracts. I’m not here to boast, I was here long before I got the resolution I did. I simply want others to get the same. I don’t think it is fair that I’m the only one to escape while others could be doing the same. Stop putting this down to luck. You’ve no idea how much time and energy was spent trying to win this battle. I’m relatively lucky that I’d got a goodwill gesture to cover some of my wasted travel expense to Slough. Maybe that bit was genuine luck 😉

There’s always more than one way to win a fight, mine was reading my original contract. I’d have been as stuffed as everyone else if I’d ignored it but this was O2’s error when the suggested I read my contract rather than deal with the misold fixed price contract. Way to go O2 😉

Why does it appear to be impossible to post anything detailing specific historic RPI rates (without a link) on this site?

It’s almost as if Which, like several commentators and the statutaory bodies, are trying to ignore the fact that 02 breached their own Terms and Conditions by imposing an increase above the actual RPI rate at the date it was announced.

We even have a poster suggesting that he / she was “…told Ofcom gave them (02) the idea behind the RPI scam”.

What “scam” is this poster – who insists that RPI is not an issue – alluding to and why?

Mission accomplished says:
5 July 2013

Dear Mr Angry,

I fully appreciate that, like many, you are frustrated about the way that mobile operators are using this RPI excuse to increase prices while still in contract. I did not say RPI was not an issue, I said that RPI was not an issue for those that were lucky enough to have been given this erroneous contract when signing via walk-in Tesco Phone Shops. It’s such a shame that so many who have this contract were mislead by O2 that the original contract the signed is irrelevant, that the customers are telling fibs and basically, denying all knowledge of these contracts. For the majority that have signed since March 2013 when O2 has now made sure that all stores have the current contract, I feel for you, I really do but your posts do not help those that have a way to get out and there must be thousands.

“Which” by the way have been very helpful with regards to my case and this tasty contract and I can’t thank them enough.

As for the ‘RPI scam’, I doubt you’ll find any info on that, that is just the way I’m describing it.
What you need to look for is “Material Detriment”. Whether Ofcom did this to allow mobile operators to do what the now do with RPI is open to debate but I believe this speculation has been posted by the media not long ago. I definitely found something like this somewhere, Daily Mail but hey, who believes everything they print 😉

Like I said, RPI is not an issue for those that have the contract I and many others have. That is what I meant be not an issue and this is where you need to be clear and confident about what you post on a a forum that is supposed to help people.

Like I’ve said before, it’s actually those changes they made to the contract and the fact I was mislead by O2 on many counts that made me fight the way I did. I just wish others who have this contract would do the same. Maybe I’ve just got too much time on my hands.

Even now, both O2 and the mobile outlets are still telling folk there contracts are fixed for the period agreed and to the best of my knowledge, there is no longer a mobile contract that doesn’t use RPI to trap you in a contract that isn’t really fixed and in my eyes at least, Ofcom has made it easy for them with this “Material Detriment” ruling. You have to prove your ‘Material Detriment’ if you want to be able to leave without penalty. O2 previously called it “Disadvantage” until the changed the terms and added all this RPI flannel. Now they call it “Significant Disadvantage” and guess who gets to decide what is ‘Significant’?

My contract didn’t that all important wording and as they had not advised, as per the contract I signed, that the contract had now changed, they were now in breach of the original contract. This is the reason it is SO, SO vitally important to read and understand your contract to the letter.

Just for the record, in contractual law, terms have to be fairly written and a court of law can overturn any term that they agree is unfair. Try this one for size:

“20.2 If we change the terms and conditions of this Agreement to your significant disadvantage (in our reasonable opinion) we’ll give you 30 days’ notice in writing before the changes take place.”

“significant disadvantage (in our reasonable opinion)”? This is unbalanced on the basis that O2 it attempting to define what is reasonable.

O2 would have us believe this is ok and pushed hard enough, will point you to Ofcom’s ruling on “Material Detriment” but note, Ofcom do NOT say, “Significant Material Detriment”

If you can prove your ‘material detriment’ then it matters not what O2 put in their contract. Good luck with that though because it’s easier said than done. This is where I feel that Ofcom has been instrumental when it comes to these RPI clauses.

Once again, I appreciate your frustration but please be careful what you post. There are still many with my contract who could be getting a successful outcome but aren’t because of misinformed posts such as yours. I pray that you are not one of those that took out the O2 contract via a walk-in Tesco Phone Shop before March of this year as you could have been fighting this with a very good chance of success. If I’d listened to everyone (including O2) who kept trying to tell me I was bound by the contract shown the O2 website, I wouldn’t be where I am now with a free Galaxy Note II with a £10 Giffgaff 500min Goodybag. Btw Giffgaff is pretty much O2, just check out Companies House. May be of interest to those that wonder why GiffGaffs customer care is so non-existent 😉 Regards

Billymac10 says:
5 July 2013

Just don’t get me started on the fact I only went with 02 as I had access to BT hotspots which reach my office and which I’ve now lost due to 02 saving money while charging me more ……I challenged this as 02 hotspots never reach outside of the building they are in and i cant access theirs where i work and was pointed to a clause in their contract that basically says;
“We do not guarantee service for any feature at any time, anywhere”.

I work in banking (sorry) and if we had this kind of contract in place our organisation would be fined or worse. How come mobile companies and other shysters can give me a contract that says we can do what we like and you have to put up with it.

Time to switch this commentary off I think, as going around in circles following people’s obsessive arguments is neither interesting nor informative!

Mission Accomplished says:
8 July 2013

Apologies BigDaddyCat. I’m sure most folk probably knew about my and others unique situation, just got a bit concerned that some may have been put off fighting after a certain posters assumptions.

I still find it hard to believe that nobody else seems to have got the resolution I did. I was really hoping there would be a flood of folk taking on this particular operator with success. I guess I just have too much time on my hands.

Please accept my apologies,
Best regards MA

PaulaCantwell says:
22 August 2013

June has come and gone and still nothing from Ofcom, any idea when their decision might be available?

Angiec590 says:
27 January 2014

I have been with my provider for 5 year this last contract term has seen 2 price increases which brings my original £40 contract up to almost £45 now in less than two year time frame. Mobile providers expose us with 2year contracts when phones only have a 1 year warranty and it’s a fight to get them fixed even though it manufacturing faults. Now they want us to pay more due to inflation? What inflation might that be? Let us leave then we all shop around for the best prices so why pay more when new customers will get a better rate?

Ray Blackwell says:
28 January 2014

I think it is disgracefull that Ofcom appear to have given protection to the customer with one hand and removed it with the other. According to cheating O2 Ofcom rules permit mid contract increases without exit rights so long as the network states in the T & C that prices will rise. Either Fixed means Fixed or it doesn’t, it can not be seen to work both ways.. I have just movedmy business from O2 over to ThreeUK, Who quite clearly state on their website that they will not increase tariff costs during the fixed period of a contract. So happy now that I dumped O2 after being with them since the late 1990 s.