/ Technology

Here we go again, T-Mobile hikes prices for existing customers

Man angry on mobile

One of the UK’s major mobile operators has decided to hike its prices – even if you’re on a fixed contract. Sound like déjà vu? Orange did this last year, but now T-Mobile wants more pennies from your pocket.

T-Mobile has decided to raise prices for its contracts by 3.7% – this applies even if you’re on a fixed contract. There are a couple of contracts that are exempt: the Full Monty and You Fix tariffs are relatively new, so prices on these will stay the same. But millions of other T-Mobile customers will see their next bill rise.

T-Mobile says the price rise, just under £1 per month for a £25 contract,  is down to ‘the rising costs of the business, linked to inflation [and] our desire to continually invest in our network and propositions to provide the best service for our customers.’

But if Orange’s price rise is anything to go by (T-Mobile and Orange are both part of Everything Everywhere) talk like this is unlikely to calm the storm of customers calling to cancel their contracts. The problem is, if you’re in a contract, you can’t cancel…

Is this a breach of contract?

Well, the last time this happened we spoke to Ofcom to see if there was any way customers could complain or reject the price rises. Unfortunately, Ofcom concluded that ‘[Orange’s] price rise is not likely to be a breach of current legislation’.

How can that be? Surely if you’ve paid for a product (in this case, a phone contract at agreed fixed rates) the company shouldn’t be able to charge you more for it later on. Unfortunately this isn’t the case – mobile contract T&Cs often state that they may raise prices within the RPI, and there’s not much you can do about it.

What can T-Mobile customers do? Not much, unfortunately. When Orange’s price rises hit, some customers complained and got small payments as a gesture of goodwill, or were allowed to switch to a slightly cheaper contract.

However, this is not guaranteed, and T-Mobile is not obliged to offer people anything. T-Mobile customers will, understandably, be angry about this. The rule on below-inflation price rises is not well-known or publicised. I think this is one of the biggest problems here.

Don’t hide your T&Cs

OK, no one likes price rises, but in many situations we can see why we’re paying a bit more – if there’s a shortage of wheat we can understand the price of bread rising, for instance. But crucially, we know what price we will pay at the time that we make that purchase. The bread costs 99p – no one will turn up at our house a week later asking for an extra ten pence.

Usually we see mobile contracts in the same way. We ‘purchase’ at the point of making the contract. So I think that if it’s likely contract prices will rise, mobile phone companies should be pointing out that the ‘contract’ price isn’t absolutely set in stone.

This information shouldn’t just be buried in the terms and conditions, on a piece of paper that no one reads – it should be right up-front, in big, fat letters. Because, after all – the price is one of the most important factors in buying something.

Some people are diligent and read through the (sometimes epic) terms and conditions for any contract they make. But many don’t – in our poll on this topic, 94% of 1,036 people didn’t realise that mobile contracts weren’t at a fixed price.

Are you affected by T-Mobile’s price hike? Or are you worried that your mobile operator might be next to raise prices?

Comments
Guest
michelle says:
25 April 2012

You wont get anywhere I complained to them through the highest level and ofcom and this is ofcoms response, T mobile still havent bothered to reply after 3 weeks, my price increase has come on my first bill at £13 for the contracts I have with the vat, which is a pretty big hike for a month (I have a few contracts) I will certainly be voting with my feet when each ones comes up for renewal, T mobile service has really peed me off this time, if they cant be bothered to reply to the complaints after Ive been a loyal customer for so many years they obviously dont think of customer service very highly. the service coverage has declined also this last month. On facebook they simply removed my comments without even justifying themselves, not a company I want to deal with anymore.. this is the oftcom letter.

Thank you for your email of 5 April 2012 complaining about T-Mobile’s decision to increase their line rental prices.

We have had a number of complaints similar to yours, and acknowledge that many consumers feel unhappy about these changes. We have therefore considered this matter in line with relevant consumer law (The Unfair Terms in Consumer Contract Regulations 1999 (UTCCRs) and General Condition 9.6 (GC9.6)).

While we are aware of the widespread concern over T-Mobile’s decision, we have concluded that, based on the evidence available, the contract term which allows T-Mobile to increase charges by an amount equal to or less than the Retail Price Index (RPI) in any 12 month period is likely to be acceptable under the UTCCRs, provided the term has been clearly brought to your attention. We also considered this issue under GC9.6 and have concluded that, in general, this rise of 3.7% is unlikely to result in a material detriment to the majority of those customers affected.

However, we also understand that whether or not a consumer suffers material detriment will ultimately depend on their individual circumstances. As such, if you believe you have suffered, or will suffer, material detriment, you should contact T-Mobile and provide evidence to support your claim. T-Mobile also has a dedicated web page relating to information about the changes.

Hopefully by raising your concerns with the related evidence you will be able to resolve your complaint. However, if you are unhappy with T-Mobile’s response, you should follow their complaints procedure. This can be found on their website.

While the final stage in T-Mobile’s complaints procedure refers to the Alternative Dispute Resolution (ADR) scheme (‘CISAS’), please note that CISAS is not able to consider complaints about the fairness of price increases generally. However, where a customer has concerns that T-Mobile has not followed the procedure to introduce such a price increase, CISAS may be able to consider this on a case by case basis. CISAS is a free and independent service for residential and small business customers, and can consider a complaint once it has reached deadlock or has been ongoing for over 8 weeks. Additionally, T-Mobile must abide by their decision but you can reject this and seek legal advice if you remain unhappy.

Finally, if you remain unhappy with the deal you are on then you may wish to consider your options. Ofcom accredits two mobile price comparison sites: http://www.billmonitor.com which can help consumers find the best deal for them. You should, however, check your terms and condition for any charges that may apply if you decide to leave your contract early. We would also encourage you to check the terms and conditions when shopping around for other deals.

Guest
Michael says:
26 April 2012

T-Mobile should not impose price hikes on their customers which are hidden in small print. Its bad enough trying to work out which tariff is best. the tariffs that are available always short change the users and if you go over your allowance in the contract you pay heavily for it. I have 8 business phone contracts with T-Mobile and as they run out I will go elsewhere and I hope everyone else does the same.
T-Mobile are trying to justify their increase as necessary to cover investment costs in new technology (which will make them more money). At the time of the purchase of my contracts, these were things that I may or may not have wanted, so why should it be forced upon me. T-Mobile is making huge profits and have made a business decision to make even more by Terms and Conditions set out in their small print which most people cannot understand.
T-Mobile, in my opinion, are being deceptive and have underhandedly hiked up their prices because they believe they can get away with it and there is nothing that Ofcom, as proven, can do about it. It should be made Law that if you advertise a rate / tariff, if it is subject to Terms and Conditions such as price increases, this should be as clear as the rate / tariff they are selling. Other Industries such as Insurance, have been brought to task over this in the past, so why not Mobile Phone Companies.

By the way, whilst typing this e-mail, I realised that three of my phones are now out of contract, so how can increases due to the Terms and Conditions be justified? Do Terms and Conditions apply still when you are out of contract ? That’s something for T-Mobile, Ofcom and Which to think about.

Guest

I blame OFCOM for allowing T-Mobile to sell contracts in this manner. I sent an email explaining my situation to them and got a reply stating that while they can understand my frustration at the situation i am in they are unable or unwilling to investigate the way T-Mobile sell there contracts . I can now understand how T-Mobile can get away with blatantly misleading and in my opinion miss selling there contracts when the regulatory body set up to police the industry does nothing . OFCOM should now be disbanded

Guest
Tony B says:
3 May 2012

Following my comment on the 11th April, I wrote to my MP, David Crausby. Since then my MP has undertaken to write directly to Downing Street. Yesterday I received a reply from the prime ministers office informing me that the prime minister has now directed the issue to the Department of Culture, Media and Sport.

I believe OFCOM have allowed a company to set a unfair precedence with regards to price rises to customers who have committed themselves to contracts. And as such I firmly believe other companies will now be looking to add the very same T&Cs which “permit” the price rise. Baring in mind I have contracts with my electric and gas suppliers I’m starting to doubt how good those contracts are!!!

Guest
Sonya says:
8 May 2012

Its only a month for my contract to complete, thank god that I got to know these guys are so unreliable. Won’t even think of extending my contract with TM.

Guest
rory says:
17 May 2012

If you have received this notice of increase then you can cancel your agreement without paying the cancellation charge by virtue of sub-clause 7.2.5.2 ” …is of material detriment … ” The agreement does not define define material detriment therefore so long as you simply state that the increase is of material detriment to you then this is indisputable.

Guest
Zanda says:
17 May 2012

I tried that ant there response was “we will not consider cancelling the contract without penalty for anyone” I even took it to their ADR how said it is a contractual issue and could not help.

Guest
cadoonga says:
24 May 2012

guys 3 has just done the same and we just have to live with it as you will pay more out of you pocket even when you complain. i still have 20 months remaining on 2 contracts. bugger.