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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
David Baldwin says:
2 April 2012

How can Offcom sweep this under the table as being “justified”?
About two thirds of every phone contract, compare yours to a SIM only deal, is made up of purchasing the phone. Now I would have thought that it would NOT be correct to increase the interest rate on the purchase of an item during the purchasing period. This would mean that it should be ILLEGAL to apply a 3.7% increase on the WHOLE monthly payment, the actual increase should only be applied to the portion of the payment that is attributable to line rental i.e. ONE THIRD of the proposed increase.

michelle cardno says:
2 April 2012

I have just received notice that all 5 of my contracts including my broadband dongle is to be hiked up meaning effectively a £7 a month hike! After 15 years with t mobile, and horrendous billing errors this last year and probably the worst customer service Ive ever known I will now definately be moving to other providers as my contracts start to expire this year. Rubbish service, awful and rude telephone staff and a blanket ban on any compensation or apology when they massively overcharge you as they did me 2 months running (200 + pm) As a once loyal customer Id say they have gone so downhill the last year, thinking they dont need to keep customers happy as they are “too big” to care they should be named and shamed.
I for one wont be a customer for much longer.

Mark McDaniel says:
2 April 2012

I have just recieved my letter and the new figures are incorrect, because i get a “loyalty discount of £2.50” , but the new price is quoted on the price prior to the discount being applied and also the 3.7% is also calculated on the gross figure including the 20% VAT, so in real terms the 3.7% is much more. I phoned them up this morning to complain and they just simply quoted clause 7 of ther T & C’s. I asked what extra service i am getting for this increase, again nothing came back. I have 2 contracts with T mobile and both of them mature in July, and i definately will not be renewing with T Mobile. I suspect all operators will be following suit, but they will also be competing for the business that T Mobile will be losing so maybe some good deals ahead. If everyone complains about this, then they will have to do something about it, but if everyone sits back and pays without saying anything, this is he thin end of the wedge of more increases to come.

Dave Baldwin says:
2 April 2012

Don’t know how you have worked this out BUT having raised my hopes I then checked your statement and they are actually charging me one penny less (probably due to rounding) than the figure I arrive at by using the pre-VAT cost plus 3.7% and then adding 20% VAT to this figure. I was looking forward to having a reason to cancel too!

Stuart says:
2 April 2012

If customers were fully aware that T_mobile can change terms then let them but we are NOT told that and does any really read 2 pages of small print! Then they hide behind terms and conditions! It may only be pence but it is morally wrong.
The government has frozen my pay but T-mobile has added costs LOL!

michelle cardno says:
3 April 2012

just received my latest email from them after I complained to escalation team, and they sent a copied pasted bit of terms and conditions, no apology no recognition as to why I didnt get compensation or interest back on the overpayment of £400 they kept without interest for 2 months, nothing, they are rubbish and im going elsewhere now, ive also noticed the signal drops all to often since the orange merger.. I work in consumer affairs and have never known such an arrogant company who really thinks the customer doesnt matter nor does loyalty, are they that big they dont need us??? vote with your feet everyone and go elsewhere, I am they can stick my £150 a month where the sun doesnt shine from now on!

Stuart Hurndall says:
3 April 2012

I still have four months of my contract remaining and although it will cost me, I am serioulsy considering ending my contract.

This is totally wrong as consumers are forced to pay the riseing fees whether they like it or not. How about I turn around to T-mobile and tell them I am only giving them £30 of my tariff this month because the signal quality is poor at the best times. i struggle for a GPRs signal where I live so can not use the internet I pay for where I live and customer service could not give a crap.
Yet T-mobile try to smooth this over by saying althought the prices have been raised you will continue to recieve great customer service!! I should NEVER have to ring you in the first place!

mark says:
3 April 2012

Outrageous
Im in contract and think this is bad, Ive been a loyal customer but theyve blown it
Tmobile have just lost me for any future contracts

Dave says:
3 April 2012

Reading their own current T&Cs.

7.1.4 Allows them to raise the price.
7.2.3 Allows customers to cancel charge free within the contract term if certain conditions are met.
7.2.3.1 If they (T-Mob) no longer operate. OR
7.2.3.2 If 7.1.4 Is of material detriment to the customer OR
7.2.3.3 The rise is above RPI

Note their use of the word OR. I’d argue that any price rise is to the material detriment of the customer. So 7.2.3.3 which they are using to claim customers inability to cancel due the rise being not more than RPI becomes irrelevant. It’s OR, not AND.

Dave says:
3 April 2012

Oh. And another thing. For customers with discounts, the rise is far more than the 3.7%, as T-Mob are applying the %age to their own internal non-discounted contract rate, not what the customer is actually paying.
Don’t think this would be illegal, but it’s certainly immoral, and also a sure fire method of taking any trust between T-Mob and the customer, & ripping it’s head off.

Andrew says:
4 April 2012

I feel completely let down by Ofcom and Tmobile – I have agreed to pay a fixed price for a fixed term not the be haggled along the way by whatever company next takes the reigns and over spends, failing to meet their price models or understanding their own business. Everyone knows Orange is just a cash cow for france telecom and has been for years pity that now extends to Tmobile imho.

Ofcom is hopeless, they are supposed to represent consumers enforcing a supplier to honour a term price of a contract is a *very* basic thing. I phoned Tmobile and explained my point only to be continually reminded of t&c which I have not signed but agreed to by taking a contract. My point was I don’t care – I agreed to a pay tmobile a fixed amount for a fixed term, anything that changes to that arrangement is a breach in contract and any trust of that company I had no matter what they say or how they phrase it (Ofcom get your act together).

Such changes should be limited to outside contract terms. If they can’t predict or budget accordingly then they should not have contract terms and just do pay as you go ….

To be honest I would have stayed if they just had said they would raise the cost if I take up another contract term but doing things this way and bending the law at every point to meet their own needs is just dishonest and just a waste of time.

Downhill from now I feel now that Orange / France Telecom owns Tmobile.

Dave says:
4 April 2012

That’s really what grates. The dishonesty. Dishonest in as much as a contract for a mobile for 24 months etc is now longer a contract in their view, except inasmuchas they expect the customer to continue to honour it, and dishonest with the their methodology of applying the increase and claiming it’s limited to RPI.
If they had simply limited rises to new or renewing contracts, fair enough, nobody anywhere would have an issue.

And I agree, Ofcom are hopeless.

Liz says:
4 April 2012

Let’s all write to watchdog about this.

Pete Brady says:
5 April 2012

The price they quote is for the plan you are in without discount so therefore if paying less than the default plan the rise should be less. This is what I was told when I rang them earlier. The rise is immoral however I don’t think breaks t and c s I’m afraid. Ofcom are a joke, I brought a case against 3 mobile on a serious breach of my terms and Ofcom were totally inept at dealing with it. I’m not overly concerned about this rise but I will be remembering it when my contract ends.

weni says:
5 April 2012

Would I be right in assuming that as my pay has been frozen, my job benefits increased in cost and decreased in usefulness, and every outging I have has increased that this increase is a material detriment.
Sure a pound doesnt sound much until you add it to all the other outgoings, sadly we have no one to pass the buck to.

michelle cardno says:
5 April 2012

http://consumers.ofcom.org.uk/tell-us/telecoms/
complain here it takes a minute, although they dont help individual customers they do collect the complaints and investigate if they get enough..

Denise says:
6 April 2012

I will definately be leaving T Mobile, I was mis-sold my contract, no one told me they were able to raise prices when they wanted!!

tony TNT Montana says:
6 April 2012

Wait till T-Mobile get my charges. They have messed with the wrong PERSON.
Lets not talk about the consumer protection from unfair trading regulations(hereinafter CPR),specifically part2 sec6 Misleading omissions(read it, you will find several provisions that T-Mobile have failed on).
Lets not talk about UNENFORCIBLE (after the fact)Terms and Conditions,(hereinafter T&C’s)
Lets not talk about contracts with variable CONSIDERATION without FULL DISCLOSURE of important contractual provisions at point of sale.
Lets not listen to what other people are telling us,let me ask T-Mobile to cough up some PROOF OF CLAIMS, that
1. I did in FACT agree to T-Mobile’s T&C’s BEFORE my acceptance of their offer.
2. The monthly price I am being charged is NOT material information.
3. T-Mobile are in fact exempt from the CPR.
4. A binding contract/and or agreement exists between the parties.
5. I am not free to terminate this alleged contract /and or agreement.
6. If i’m not feeling lazy I will add more.
To be delivered to me in 14 days under penalty of perjury(no porky pies), failure to deliver these proof will constitute your agreement to my charges of £’s per month and that no binding contract exist between T-Mobile and myself. Thank you very much T-Mobile

Paul Lei says:
7 April 2012

I feel I have been somewhat mis-sold a contract. I understand T-Mobile says it’s in their T&Cs to increase tariff by no more than the Retail Price Index. However the operator while trying to sell me the contract never mentioned this, which was a very significant point I would have thought as it could affect what I was going to pay during the life of the contract. So I feel I was misled.

Rich Blackburn says:
10 April 2012

Just rec’d the increase letter from T-Mobile relating to the Business contract my firm started in Sep 2010. I rang the helpdesk to query the price rise only to the phone put down on me when I said no one had ever told me about the right to increase a “fixed” tariff. I have subsequently complained and been promised a call back but I won’t be holding my breath.

tony says:
11 April 2012

I purchased a 24 month contract from T-mobile 18 months ago and at that time checked the regulations regarding my rights to cancel in the event of a price rise. According to Ofcom

9.6 The Communications Provider shall: (a) give its Subscribers adequate notice not shorter than one month of any modifications likely to be of material detriment to that Subscriber; (b) allow its Subscribers to withdraw from their contract without penalty upon such notice; and
(c) at the same time as giving the notice in condition 9.6 (a) above, shall inform the Subscriber of its ability to terminate the contract without penalty if the proposed modification is not acceptable to the Subscriber.

I believe I’ve been mislead by Ofcom. Their 9.6 (b) clearly states I have the right to cancel without penelty but now their telling me in order to do that I have to prove that the price rise is of a “material detriment” to me. Which is basicaly saying my right to cancel is based on my abilty to aford the price rise and in order to that I have to prove I cant aford it to t-mobile and most likly CISAS.

T-mobile arent at fault here, OFCOM are! Its their regualtions which are misleading and clearly designed to deceive consumers. If they had stated that my right to cancel was based on my abilty to pay the price increase I would never have purchased a 2 year contract. WHAT USE ARE REGULATORS LIKE OFCOM?

And as for t-mobile, My contract expires 2nd Oct and I wont be looking to renew with either you or Orange.

Zanda says:
24 April 2012

Wondered if anyone had been able to cancel there contract with T-Mobile without any penalties i have been trying to speak to them about it but they keep giving the standard comments and are not listing at all – the RPI was 3.6% for march compared with 12month previous and if you have a loyalty discount I T-Mobile indicate that the increase is implemented before the loyalty discount is deducted in effect making the price increase over 4%. I image that every other mobile company will start to increase their prices now. If would be nice if there was an honest company that cared about its customers