/ Technology

Victory! Ofcom’s new rules to stop mobile price hikes

People celebrating with mobile phone contracts

We won! Together we convinced Ofcom to take action on mobile phone price rises. The regulator today announced the results of its consultation, which was as a result of our campaign.

Ofcom opted for our preferred action – to let you exit your contract without penalty if your mobile provider wants to hike prices. These new rules will apply to contracts signed after 23 January 2014. Ofcom’s Claudio Pollack said:

‘Ofcom is today making clear that consumers entering into fixed-term telecoms contracts must get a fairer deal. We’re making it clear that any increase to the monthly subscription price should trigger a consumer’s right to leave their contract – without penalty.’

Working together to convince Ofcom

After heavy lobbying from the mobile companies, there was a very real threat that nothing would be done at all. However, Ofcom has stood firm and done the right thing.

We’ve been working hard to convince the regulator to make the right choice. This year our research confirmed that most of us don’t understand ‘RPI’ price rises, and our undercover mystery shopping demonstrated that mobile phone shops aren’t being all that upfront. And you’ve been busy too, signing our petition and spreading the word.

It takes time to turn an entire industry around, but with the support of more than 58,000 of you, we convinced Ofcom to take action on unfair mobile phone contracts.

The birth of a campaign

Back in 2012, thousands told us that you were confused and annoyed about price hikes from your mobile company. We agreed – the mobile industry wasn’t playing fair and so we launched our Fixed Means Fixed campaign.

We’ve witnessed mid-contract price rises from all the big mobile companies (Vodafone, Orange, T-Mobile, Three, O2). This resulted in their customers having to collectively pay £123m more than they’d budgeted for.

The big kicker is that you can’t show your dissatisfaction by voting with your feet. Many were stuck with months left to pay, with your provider expecting you to pay it all up if you wanted to leave. All the while they pointed to little-known terms in the small print. That’s about to change.

Your support secures victory

Thanks to you, millions of mobile phone, broadband and landline customers will benefit from new rights. If mobile providers want to hike prices on fixed contracts, you’ll be able to show them what you think by cancelling without having to pay a penny.

The new rules should also be an incentive to stop providers from increasing prices in the first place – so that they can keep their loyal customers.

This is your victory, so make sure to share it with your friends and family. We’ll be keeping a watchful eye to make sure these new rules are implemented swiftly. Congratulations!

Comments

Well done Which? It just shows what can be achieved when the will is there to fight for basic rights. Please keep up your good work.

“Ofcom’s new rules to stop mobile price hikes” ok so I’m being picky, but that’s not what Ofcom are doing, they will “let you exit your contract without penalty if your mobile provider wants to hike prices”

So companies can still hike prices.

So clearly Fixed still doesn’t mean Fixed 🙁 which would have been my preferred solution.

I have been wondering about the same thing, William.

If the companies decide to up their prices at about the same time, then the opportunity to cancel a contract without penalty will not be very helpful.

It will be interesting to see what is in the new Terms & Conditions. If someone decides to leave after three months of a two year contract, it seems unlikely that they will be allowed to keep the ‘free’ phone they received.

These companies don’t care about their “loyal” cashcows, so I doubt they’ll be making changes in their favour. Hence the regulator really should have use a bigger stick.

Lets hope I’m wrong for once.

This “may” be good news. Like ALL energy suppliers hike prices (have they EVER gone down i.e. when wholesale energy prices go down??) whenever they feel greedy (£750million profit is not enough for these scum of the earth companies), ALL these mobile companies will collude to hike prices one after the other in quick succession (if not together), so is there much point in jumping from the frying pan into the fire as such? The only “opportunity” you get is to re-evaluate the market again (all deals across all networks) and see if there is a better deal out there for you – earlier than when you could have done it before i.e. at the end of your contract. Don’t forget that there are only a few “real” network providers out there. The rest of them just piggy-back on these networks i.e. Tesco Mobile, TalkMobile. Therefore, prices will probably rise across the board. Anyway, unless these companies are fined heavily and more stringent Consumer Protection laws are brought in and enforced, this is just another industry that will continue to screw us common people (not the rich who can afford anything or get frebies from companies/brands or politicians who get most things free or re-imbursed via expenses or expense fiddling). “Rant” / “fact-sharing” over!!

NakiLad says:
25 October 2013

Fantastic outcome. Well done Which? Does this running just apply to mobile companies. Since we took out our fixed term landline contract with Sky in September, they have increased the monthly charge twice. Will landline providers also be bound by this new ruling?

Lou Austin says:
25 October 2013

This is just brilliant,why can’t Which run all these quango,s that talk a lot but do nothing such as Ofcom,Ofgerm,Othello etc etc,if Which ran these departments all our prices would be lower and the rip off companies would have such a hard time.
Well done Which !!!

Robert says:
25 October 2013

Good news, but will not affect me at present. I complained to Virgin Media about their price rise in July and they have credited my account with the full amount of the increase that I am incurring from July to the end of my contract. Success!

Chris says:
26 October 2013

Robert – you deserve a job with Which.

AdeOluwa says:
28 October 2013

This is great and wonderful news to all consumers. Thank you Which? for this brilliant work you are doing. And I hope you are going to be extending it to the Fixed Line rentals. Sky and BT have given notice of increase to their rental charges. It is supposed to be a yearly contract.

Peter says:
28 October 2013

It does seem to me that the mobile companies still have the better of the situation. I sign a contract with a supplier, if I want to break the contract its costs me money, if they want to they can without any compensation to me.
As a more general point the Which idea that we can use market forces to win these sorts of battles seems to me me inherently flawed. Large corporations are clever enough and the situations usually sufficiently complex enough for them to find other opportunities for keeping up their revenues. I say this having just today received a text from Vodafone saying here are price changes for items outside my contract, eg extra text messages, extra data usage etc!

Steve B says:
29 October 2013

I have a contract with Vodafone – and I’ve also received a text telling me my prices are going up.

The link they sent me is below.

http://www.vodafone.co.uk/campaigns/price-changes/pricing-changes-21/index.htm?cide=rdr-13144-02

I was hoping that this ruling would stop Vodafone from acting like this, to people in contract.

This is very good news but the correct result should be that we should not have been charged the extra! I do not want to change my contract as I am happy with the deal but it is unfair that they should be allowed to do this. Nobody is going to leave a good deal on their contract for the sake of a few pence which is usually what we are talking about. It is the principle that is at stake here.

Martin Brook says:
11 November 2013

Well done on this, Which? Great news!

– However, being ‘allowed’ to leave a contract before termination is not nearly good enough; The customer my well be satisfied with existing arrangements, and may well feel disinclined to fool finding an alternative provider.

If the contract arrangements have been violated by the old provider, then the remaining amount of money that the customer would have paid should be forfeited and paid to the customer by way of compensation in the same way were the situation reversed.

I’ve been using mobile ‘phones for some years now, and my requirements have always been well served using PAYG; It would never enter my mind to undertake anything so foolish as to allow these unpleasant companies to learn my bank details.

It was indeed refreshing to learn the other day of ‘Ofwat’ jumping on Thames Water when attempting to increase bills; We need to dump ‘Ofcom’, and introduce an organisation with real teeth to replace it, as right now its simply not serving the nation’s needs.

Xter says:
5 December 2013

It’s so frustrating that I was hit by the hit Three imposed on contract customers ages ago.

I paid under protest, was on the phone a lot, sent letters and emails complaining etc etc, but these new rules only apply to new contracts!

What about all the money the mobile companies scammed off people??

It’s like someone stealing something from a house and the police going “ok, well you can keep that item you stole, but don’t do it again” and slap them on the wrist.

Such a hollow victory.

I will never sign on a contract that is more than 30 days now, and I’m sure I’m not the only one, even if they have these new rules. Mobile contracts with a handset are generally a rip off when you calculate the money you will spend over the term anyway.

Paul Wright says:
23 January 2014

In the article above you state that “These new rules will apply to contracts signed after 23 January 2014” (today) however O2 site clearly states

“On your March 2014 Airtime Plan, prices will be adjusted by 2.7% in line with the RPI rate of inflation announced in January.

From 2015, Airtime Plan prices will change every year by the RPI rate of inflation. We’ll announce the change in February and it will start from your April bill. Learn more”

Are they still allowed to this then? as looking for a new contract, but sick of these price rise’s!

Don’t be fooled by the “fixed means fixed” slogan, that’s not what has been achieved. Companies can still hike prices, you can just leave without needing any other reason than you’ve hiked prices, I’m off.

Paul Wright says:
23 January 2014

Not according to O2’s website! If you look at their FAQ it clearly States:

“An increase of this kind does not entitle you to end your agreement mid-contract. As set out above, our terms for customers signing up both pre- and post- 23rd January allow us to apply a price increase to reflect RPI. ”

And they even go as far as mentioning the 23rd Jan date!

Just reading http://media.ofcom.org.uk/2014/01/22/protection-for-consumers-against-unexpected-mid-contract-price-rises/?utm_source=Twitter&utm_medium=Tweet&utm_campaign=mid-contract

it gets worse, they’ve only issued guidelines

I think O2 will be reading “It sets out that if a provider wishes to increase the monthly subscription price (or prices) agreed by the customer at point of sale, customers should be given at least one month’s notice of the increase and be allowed to exit the contract without penalty.” and ignoring the word “and”.

Looks like someone will need to test these guidelines as I feared ofcom haven’t gone far enough.

Paul Wright says:
23 January 2014

Yes, the link is at

http://www.o2.co.uk/desktop/prices

The FAQ clearly states that they can and will continue to increase the monthly line rental every year, although this is also made clear when you attempt to purchase a handset from them online (although admittedly some people could still miss it…)

Paul Wright says:
23 January 2014

I’ve just bought the phone i wanted on O2 via a third party website it was £5 a month cheaper and there was no mention of any price rise! Unless it was hidden in the T&C some where…

Given what it says on their website I imagine I would have a massive fight on my hands to cancel penalty free if they do increase their prices in March…

I have received today a notification from O2 that the tariff on all my business phones will increase by 81p due to RPI (aka rip-off public immediately). There is obviously nothing I can do seeing we are at the mid point of a 2 year contract and the fact the never mentioned when we took the contract that it would be subject to change. Nonetheless I phoned them and told him how unhappy I was about the whole thing and that when the current contract end I shall take my business somewhere else, this I fully intend to do. – Should be fun negotiating a new contract next time.! Thank you Which!

Stephanie says:
29 January 2014

I took out a 2 year contract in mid December 2013 with O2. Today I have received a notice that the monthly charge is increasing in March due to RPI increases. I’m only just one month in. How can this be allowable? When I contacted o2 their response was that they are only increasing the monthly amount by 59p!

David Rowson says:
23 March 2014

Pure arrogance from 02. I will spread the word avoid 02 they don’t deserve us. You have the right to leave a supplier if there service is not up to standard. Keep a note of any complaints and cancel your contract

Effy says:
16 June 2014

Received today a letter from my provider, Virgin Mobile, advising a 2.5% rise in tariff price from 22 July.

I have been with Virgin for a number of years, but this increase is a year into a two year contract. I am appalled, and no reason is provided within the letter for the increase. It does state they are changing their roaming charges, so calls to and from the EU will be cheaper. As I don’t travel, this is largely irrelevant from my point of view.

They have provided a Wifi app for Android that “automatically connects to over 20,000 Wifi hotspots across the UK…..” May be of some use to me. I’ll download it and see if my mobile connects on a frequent basis while I am out and about.

However, I do not feel that these additional features explain a 2.5% increase in tariff charges. As I am on the lowest tariff, and use my mobile infrequently (apart from texting) I am assuming they are filtering their “small” customers hoping they will leave.

These hikes in prices mid-contract shouldn’t be permitted. As you say, “Fixed Means Fixed”.

“It does state they are changing their roaming charges, so calls to and from the EU will be cheaper” Although its true, its actually just marketing weasel words. They’re not doing because they want to, they having to do it along with everyone else because of the pesky EU bureaucrats….
“Lawmakers in Brussels voted to back the proposal, which will phase out the extra charges for using mobile devices across the European Union by December 2015.”

“They have provided a Wifi app for Android that “automatically connects to over 20,000 Wifi hotspots across the UK” I’d be wary of this too, in case your phone suddenly uses up all your data allowance and you’re hit with a hefty bill. Although I’d also be happy to be provided wrong for one.

Peter L says:
20 June 2014

Effy, I got the same letter as you, and my situation is very similar with Virgin Mobile. The 2.5%, whilst only a few pence a month, seems to be above the RPI for May anyway. I am thinking about ringing up and saying I will cancel, just out of principal – but I am on quite a good deal. It would be interesting to hear what they say, anyway. I am a very light user, and don’t need 500mb of data etc. so PAYG may be the way. I can’t see anything in the small print that said they could do this rise.