/ Technology

Mobile phone prices up again – is Three your unlucky number?

Three Mobile has increased its prices by 3.6% for existing customer’s monthly plans following Orange and T-Mobile before it. For fear of bastardising Lionel Richie’s lyrics… ‘Three times a price rise’.

Anyone who signed up to Three before 8 March 2012 will be hit by the price hike from 16 July.

Mobile and mobile broadband customers will have to swallow a 3.6% price rise. On a £25 monthly plan that will be around 90p extra a month, or another £11 per year.

Only contract prices will change, with calls and data remaining at their current levels. Pay-as-you-go customers will also be unaffected. If you’re going to be affected, Three will contact you by text, email or letter between 21 May and 1 June to let you know. Three said of the price rise:

‘We know that increases are never welcome, so it’s not a decision we’ve taken lightly and we’re confident that your plan still represents excellent value for money.’

It’s all in the terms and conditions

It’s a case of deja-vu – Orange and T-Mobile have previously increased their own contract prices. Each time this has happened, their customers have come to Which? Convo to vent.

It’s understandable really – if you signed up to a contract, whether 12 or 18 months, your expectation would be that the £25 or so monthly price would stay static. Not so, mobile companies have a clause in their T&Cs that allows them to increase contract prices on a yearly basis as long as they’re under the rate of inflation (retail prices index).

And when we’ve questioned the regulator Ofcom on this, it has told us that the price rises are ‘not likely to be a breach of current legislation’.

But when we actually ask mobile customers whether they know prices can go up, 94% of 1,036 people voted in our poll that they didn’t realise their contracts weren’t at a fixed price.

It might be legal, but it’s not a line of fine print that many people are aware of. And when customers are told that they can’t cancel their contracts early without charge, the red mist starts to descend.

Make price rise terms clearer

The key is making the fact that prices can rise by inflation clearer to new customers, instead of hiding this clause in reams of terms and conditions. Our principal advocate Mark McLaren said:

‘On the one hand, it seems consumers’ expectation is that a mobile phone contract is a fixed price for a fixed term. On the other hand, mobile companies are able to increase prices by RPI during the term of the contract. This is a contradiction that can only be solved by either regulatory intervention or, at a minimum, better information to consumers at the point of sale.

‘That’s why we welcome the fact that Ofcom’s priorities for 2013 include “promoting effective choice for consumers by ensuring clear information on service, price and quality is available”.’

Are you a Three customer who will be hit by this price rise? How do you feel about it? Did you know that mobile contracts aren’t strictly at a fixed price?

[UPDATE 25/05/2012] – As you know, we’ve been talking to Three. Which? doesn’t think it’s fair to increase prices in this way without giving consumers the ability to cancel as a result of the price increase. We think that when you sign up to a fixed rate deal, that’s what you expect it to be. Fixed, for the period you agreed to.

We think that Three should recognise this and do the right thing by allowing those customers who can’t stomach this increase to cancel their deal without penalty.

A spokesperson for Three responded to us as follows:

‘Despite costs increasing in a number of areas within our business, we have not passed on an RPI level rise to our contract handset customers in the nine years we have been in operation. Increasing our prices for existing customers is a decision we have not taken lightly. We know that increases are never welcome and we have tried to do this in the fairest way possible for all of our customers. We are confident our plans continue to offer the best possible value for money.’

Comments

So a contract is no longer a contract, I seem to remember when this has happened in the past many people have Ben able to get out if their contracts early but a simple change in the T&Cs effectively negates my rights? Outrageous!

Chris says:
21 May 2012

I got the contract over the phone and have been given the terms and conditions. I am sure the sales guy said I will be pay £10 every month for 24 months. No possibility of it being put up or me getting a cheaper option. If they take the extra out of my account… I am calling the police and reporting it as a theft!

Chris says:
21 May 2012

haven’t been given the terms and conditions…. big difference lol

I do not trust 3, albeit for a different reason. I bought a MiFi wireless mobile broadband device with 12 months’ data from my local 3 store for £81.99, which was much cheaper than the price online. I made it clear that my use varied a lot from month to month and did not want to pay £10 per month for a contract or to top-up every 30 days.

Having made my reason for the purchase clear, I was dismayed to find that I could not top-up for a further 12 months at the end of the year. I did write to 3 but received no reply.

Fortunately I found that it is possibly to buy suitable SIM cards with 12 months’ data for about £58 from various suppliers on eBay. I’m waiting for my card to arrive, and I hope that I have not made an expensive mistake. I will be interested to see what the local 3 store has to say when I show them my purchase.

Darren says:
22 May 2012

” I was dismayed to find that I could not top-up for a further 12 months at the end of the year”

You can. You could have bought another 12GB of Data for 12 Months Pay-As-You-Go Mobile Broadband sim on it’s own for around £70 in a 3Store to put in your MiFi.

Regards, Darren.

Thanks Darren. My local 3 store and Customer Services both denied that this is possible, saying that I must either pay £10.87 for 30 days or take out a contract. I have just checked the 3 website and see that a SIM with 12 months data is now offered for £70.49 and the 30 day charge has been decreased slightly.

My new SIM, bought for £57.99 from an eBay vendor, arrived this morning.

Now installed and working and I have mobile broadband for £5 a month for the next 12 months, which I can use for two laptops and an iPad. I guess I am one of the few happy 3 users at the moment.

If 3 decided to abandon their contract price increases they could avoid a lot of criticism.

Brian says:
21 May 2012

There is clearly a widespread view that the contract price is fixed as there “was” a common view that your endowment would pay off your mortgage! The price increase is hidden in the small print “to deceive”. Small print is written small so as not to stand out by people who know very well what they are doing.

A heartfelt appeal to anyone with the power to control this. I don’t want these things explained to me at the time I make my choice in the shop. I don’t want to know about all the complex ins and outs and the what ifs that I can’t quantify. I also don’t believe that a 2 year fixed deal is too much of a risk to be just that – fixed. I just want to know the cash value so I can make my choice between one provider and another. I don’t want to pick what “appears” to be a better deal only to be stuffed in year two by a corporate dirty trick.

[This comment has been edited for libel reasons. Thanks, mods.]

Gerry London says:
21 May 2012

I think this is extortion and greedy, inflation is going down at the moment and three are doing the opposite, surely they should have thought of inflation when they were setting their price plans, it just shows how these mobile companies(three) con customers with what seems to be good deals just to raise the prices later. I hope people will keep away from this disgraceful companies.

Ian says:
21 May 2012

Its not the money, its the principle of the thing.
At no stage was i told that it wasnt a ‘fixed’ contract, I like most people considered this as a FIXED £30 contract.
Stinks how they can do this to their existing customers when I bet you could walk into a 3 shop and get a much better deal with the same facilitys as I have now.
Stinks.

Mike says:
22 May 2012

I thought this was a fixed price for the duration of the contract as did all above. The service from this provider is getting worse and now i am having to pay more for it! Roll on September when my contract ends. Having been a customer with three virtually since it’s start in the uk, I am saddened that it is not able to provide an acceptable service. Goodbye 3. Hello GIFFGAFF.

I don’t think it matters what it says in the T&Cs, EVERYBODY is sold these contracts on the basis of a fixed-price for a number of months and the possibility of this amount changing is NEVER pointed out at the time of sale. Surely this makes the T&Cs unenforceable?

Does it not called missold contract for Three mobile customers ? It is same situation like missold PPI by Bank. This will go on untill OFCOM takes stronger steps against the company. Three Mobile is taking full advantage of weakness of OFCOM.

gerrymoth says:
22 May 2012

The thing is 3UK have increased their price above the RPI? The RPI for April 2012 was 3.5% and they have increase by 3.6%, so their reasoning its in line with RPI is incorrect?

gerrymoth says:
22 May 2012

Three’s T&C’s doesn’t actually state it can freely change in line with RPI, only that it must inform you if its above RPI?

T&C’s Section 4.1 (b) we will let you know at least one month in advance if we decide to:
(i) discontinue your Package; or
(ii) make any variations to your agreement which are likely to be of detriment to you; or
(iii) increase the fixed periodic charges for your Package (if applicable) by an amount which is more than the percentage increase in the Retail Prices Index Figure (or any future equivalent) in any twelve month period. You can end the agreement for such variations as explained in Section 10.

T&C’s Section 10.1(d) Within one month of a detrimental variation to your agreement.
You can end the agreement within one month of us telling you about a variation to your agreement (which includes your Package) which is likely to be of detriment to you. You must give notice to Three Customer Services within that month and your agreement will finish at the end of that month once we receive your notice. (A Cancellation Fee will not be charged.)

Jimbob says:
22 May 2012

Agree with gerrymouh, rang three custome services and they keep repeating the RPI clause 4.1d and cant tell me what clause 10.1 d relates to – we need a campaign that their clauses are not legitimate and 10.1d can be applied.
their customer services are not empowered to tell me what is material detriment to me (they tried to….)

Rachel says:
23 May 2012

Not sure if this makes me sound stupid, but does clause 10.1 mean that i can cancel my contract further to them increasing the price?

Sorry if I sound thick, just not happy about my bill being increased and would like to know if there is a way out?

thank you!

ScottG says:
22 May 2012

Well at least that confirms that Three are simply a “me too” company who no longer have any real advantage over the rest. Personally, I never found their service any better. I’ll reward their loyalty in the same way they’ve just rewarded me. Bye!

humayun says:
22 May 2012

Does this mean that I can request my contract to be cancelled once this price effect comes into place????

This change is digusting. It defeats a purpose of a contract of it can change. And why are they targeting us. They do know that most people will have the intentions of leaving them, whether it’s now or when the contract is up. The service has always been terrible and they do not reward loyalty.

I would like to know the same thing as Humayun. Is it possible to cancel because of this change? 4.1 says they can make a change. But 10.1 says that we can end our contract within a month with no fee if they make any changes to our agreement or package. Am I understanding it correctly?

My reading of the T&Cs is exactly the same as gerrymoth – I don’t see *any* clause saying we can’t cancel if they put the price up. In fact, quite the opposite. I shall be pursuing this much, much further.

I’d be very interested in hearing a Which legal expert’s view on this?

R.

I have to admit I knew when I took the contract that 3 could change the price as I did read the T&Cs but my understanding was also that at that point I would have the option to end the contract early. Honestly for the amount it is raising I might put up with it but I don’t think 3 are being very honest or transparent here. It’s so shortsighted – not only are they going to lose some customers as soon as their contract is out due to them being seriously annoyed but they are also setting themselves up for a PPI/Bank Fees style challenge in the future. I’m decided. As soon as this contract is up I’m going to pay as you go!

Lutonpete says:
22 May 2012

I don’t remember them raising it last year when RPI was 5%. Still the cheapest mainstream mobile BB.
How many people read the terms of this Site when they ticked the box?

Richard says:
22 May 2012

So can’t we legally challenge them? Can’t we take them to a small claims court? They can’t be present at every legal hearing can they? This is what we should all do! Instead of moaning about it.

I will be checking back to see what people have said, thanks.

Lutonpete says:
22 May 2012

In the terms you agreed. Can’t challenge can’t leave – well you can leave but it will cost you the remaining months less vat and less 2% so take care if they offer that option on the call Centre. I’ve been there before with a citrus based company. The only thing ofcom made unlawful is the rolling contracts. This is legal.