Ofcom forces U.K. networks to let customers end contracts if they raise prices

One of the most bitter pills to swallow as a mobile network customer is being told, less than halfway through your two-year contract – that the price of your plan is going up, and there’s nothing you can do about it. Today, the U.K. telecommunications regulator, Ofcom, revealed plans to impose new restrictions on networks when it comes to this practice, and to provide additional protection for consumers.

From 23 January 2014, new Ofcom guidance will come into effect, which directs carriers on “how to interpret and apply current telecoms sector rules” with regards to mid-contract price increases. Ofcom has said that it will view “any increase to the recurring monthly subscription charge in a fixed-term contract as ‘materially detrimental’ to consumers”.

Further, it instructs service providers that they should “give consumers at least 30 days’ notice of any such price rise and allow them to exit their contract without penalty”. This means that if your network decides to increase prices during your contract, you can end the contract immediately, and – with the exception of collecting any outstanding balance on your account – they won’t be able to do anything about it.

The good news is that these changes will apply not only to mobile contracts, but also those related to landlines and fixed-line broadband. However, the changes will apply only to new contracts after that date. You won’t be able to wriggle your way out of an existing contract purchased before then.

Your provider will still be free to make changes to what’s included for the price that you pay, but Ofcom says that it “would regard such action as a price increase – as consumers would be getting less for the same money”, so you would still be able to end your contract without penalty if your carrier decides to reduce your data allowance, for example. 

Ofcom’s Consumer Group Director, Claudio Pollack, said in a written statement:

Ofcom is today making clear that consumers entering into fixed-term contracts must get a fairer deal. We think the sector rules were operating unfairly in the provider’s favour, with consumers having little choice but to accept price increases or pay to exit their contract.”

The moves will be particularly welcome for U.K. consumers as many now consider renewing their contracts with the rollout of 4G LTE services from numerous carriers, including EE, O2, Vodafone and Tesco Mobile

Source: Ofcom 
Image based on 'Contract Signing' via Shutterstock

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