Ofcom looks into mid-contract mobile and broadband price hikes

A consultation document released today by Ofcom has revealed plans allowing UK consumers to leave a phone and broadband contract freely if the provider introduces a mid-term price rise.

From the providers’ standpoint, this could seem harsh; however, this may come as welcome news to long-suffering consumers, with the telecommunications regulator examining the issue after 1,600 complaints in the eight months leading up to May 2012.

The news comes amidst O2 putting prices up on line rental – 3.2% from 28 February – despite pleading “we’ve always done everything possible to give you great value...but now, because of inflation, we need to change the price of your tariff”.

Additionally, Ofcom’s consultation expects providers to be “clear and upfront about the potential for price increases and of the consumer’s right to cancel the contract in the event of any price increase”.

This may be good news whatever – Australian telcos were forced to clean up their act in July having been given a slapping down from ACMA (Australian Communications and Media Authority) following a whopping 200,000 complaints in 12 months.

The main cause of customer dissatisfaction here was bill shock, so a certain correlation can be seen between this and today’s news.

Responses can be sent back to Ofcom until March 14 when the consultation ends, with a decision due in June.

“Many consumers have complained to us that they are not made aware of the potential for price rises in what they believe to be fixed contracts,” said Claudio Pollack, Ofcom Consumer Group director.

Elsewhere, a recent study from ISPreview found that, for up to two in three UK broadband subscribers, they could switch to a new provider during 2013. The three main reasons for doing so were greater customer experience (48%), followed by cost (41%) and wanting a bigger data allowance (33%).

Interestingly, less than one third (32.3%) of those polled said they had no desire to switch providers.

As TelecomsTech reported yesterday, one of Strand Consult’s 2013 predictions revolved around how consumers will continue to win as prices fall and competition increases.

The full consultation document can be found here. Are these reasonable steps being taken to protect consumers’ rights or should consumers be more vigilant in reading the small print?

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