Communications regulator Ofcom has introduced new guidance today (January 23rd), aimed at restricting broadband suppliers' ability to impose mid-contract price rises.
As well as broadband ISPs, mobile and phone providers will also be affected by the guidance, which is a move to limit the number of customers who are complaining to Ofcom about being hit with substantial price rises that differ greatly from the monthly costs they originally signed up for.
A rule already exists, requiring customers to be given at least one month’s notice of any price increase and then being allowed to exit the contract without penalty, though confusion over this has prompted Ofcom to take further action.
Now, providers will find it much harder to define certain price increases as a vital part of the service, and so almost any increase in cost will provide consumers with an opportunity to leave the service.
Ofcom deems such changes as "likely to cause material detriment" to the customer - with reductions in call or data allowances also being viewed the same way.
Claudio Pollack, Ofcom’s Consumer Group Director, commented: "We have reached an important milestone in our work to ensure consumers and small businesses have better protection against unexpected price increases.
"Additionally, our new guide highlights important factors customers might want to consider before entering into a new contract to help them understand exactly what they are signing up to."
As before, the guidance requires any changes to a customer's contract to communicated in a clearly marked and transparent way, though it does not cover optional charges such as those levied for exceeding usage allowances or calls to premium rate services.
The move has been welcomed by customers and consumer groups alike, with Ernest Doku, Telecoms Expert at uSwitch.com, saying it gives more power to the people, in most cases.
"For those who've signed up to mobile, TV and broadband bundle deals, it will depend on how their provider structures their deal. While some will enjoy the same levels of protection, not everyone may be able to leave if just one service becomes more expensive," he explained.
"Also, the protection only applies to contracts taken out from tomorrow, so existing customers still face swallowing any price increases."
There is feeling among the industry that the new rules may force providers to increase their prices to account for rises that are not within their control, though overall the news will do more good than harm, Doku suggested.
"Although the devil may be in the detail, ultimately this move is a real win for consumers who are tired of having to put up with higher bills without a way out."