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Ofcom has launched a new consultation on how to protect consumers from price rises during fixed contracts for landline, broadband and mobile services.

The media regulator is responding to public concerns over the controversial practice, which is not illegal under European law.

One of the proposed measures is to allow consumers to exit their contract without penalty if their provider introduces any price increase during the contractual term.

In addition, the watchdog would expect broadband providers to be clear and upfront about the potential for price increases and the customer's right to cancel.

Under Ofcom's proposal, all communications providers would be required to follow an amended set of rules, or General Conditions.

While these would allow firms to increase prices during a fixed-term contract, consumers would have additional flexibility to switch to another provider.

However, the regulator has also proposed alternative approaches, such as consumers having to actively 'opt-in' to any variable price contract.

A complete ban on price rises in fixed contracts has also been considered, however this would contravene existing European Union law.

Claudio Pollack, Ofcom's Consumer Group Director, said: "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.

"Ofcom is consulting on rules that we propose would give consumers a fair deal in relation to mid-contract price rises."

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