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Ofcom proposes price protection for broadband and phone users

4th January 2013

Broadband, landline and mobile consumers could soon be protected from mid-contract price hikes as an independent consultation into how to better protect customers is launched.

One of the options being put forward by telecoms regulator Ofcom would allow consumers to exit fixed-term contracts without penalty if their provider puts up prices during their term of contract.

The consultation comes in response to 1,644 complaints made to Ofcom during September 2011 to May 2012 about the fairness of terms and conditions allowing providers to increase prices mid-term. Currently, consumers 'have little choice but to accept the increase or pay a penalty to exit the contract', Ofcom said. Complaints were also received about the amount of price increases.

While it is likely providers would still be able to increase prices mid-contract, Ofcom wants to amend one of its General Conditions rules so there is:

  • greater clarity in contracts about the potential for price increases, allowing consumers to make informed decisions
  • upfront clarity regarding the consumer's right to cancel the contract in the event of any price increase
  • the right for consumers to withdraw from a contract without penalty if they do not wish to accept price increases.

Other options under discussion include:

  • solely tackling potential price increase transparency
  • guidance for providers on how to interpret Ofcom laws and consumer protection laws in regards to price increases
  • whether consumers should have to actively 'opt-in' to any variable price contract.

Ofcom's consumer group director, Claudio Pollack, said: "Ofcom is consulting on rules that we propose would give consumers a fair deal in relation to mid-contract price rises."

The consultation will close on 14 March, with a view to Ofcom publishing its decision in the summer.

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