The UK communications industry regulator – OfCom – has stepped in to protect UK mobile consumers from unannounced mid-contract price hikes. In the latest news from OfCom, the regulator had examined 1063 complaints regarding mid-contract price increases from 01st June 2013 to 31st Aug 2013 which led to OfCom carrying out a review of the fairness of contract price terms. The regulator then arrived at the terms of the Guidance to telecom operators and users, which it released today.
The Guidance comes in effect from 23rd January 2014, post which any contract made for a new landline, mobile or broadband will be covered under the provisions of the Guidance. In effect, if your operator wishes to increase the monthly subscription price agreed at the time of the sale, then the customer should be given atleast one months' notice and should also have the option to exit the contract -without any penalty – should he not wish to continue with the contract.
In its release, OfCom states that "From tomorrow, consumers and small businesses taking out new landline, broadband or mobile contracts should be allowed to exit them without penalty if their provider increases the monthly subscription price agreed at the point of sale. This follows an Ofcom review into the fairness of contract price terms. This found that many consumers, in particular, were caught unawares by price rises in what they believed to be fixed price contracts."
The Guidance also applies to non-price variations in contract terms after the sale has been concluded. This small, but important, interpretation of the guidance includes the fact that if the operator chooses to make a non-price variation including limiting call, data or text options; the change would be considered as a price change because in the end, it does impact what the customer has to shell out.
The Guidance is applicable only to contracts executed on or after tomorrow – the 23rd of January 2014. Sadly, if you're on a contract before tomorrow, you won't be protected by this new guidance from OfCom. However, for all future contracts UK mobile customers can rest easy. If you're in the UK, do let us know your views on this new step from OfCom, our comments section awaits.