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  5. Ofcom clamps down on mobile contract price rises

Ofcom clamps down on mobile contract price rises

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Ofcom clamps down on mobile contract price rises

Ofcom is mulling measures that could call time on mid-contract price increases by enabling customers to leave their mobile phone provider without incurring a penalty charge in the event of a rise.

In the wake of a review soliciting responses from 1,600 Britons, the telecoms regulator is conducting a consultation to formulate proposals to curb the practice.

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As well as empowering customers to leave mid-term if they are hit by an additional monthly charge, networks will likely be allowed to increase prices on the condition that this is made transparent in the contract.

An outright ban on rises during contracts was ruled out on the grounds that it would not be “consistent with the European legal framework," according to Ofcom.

Ernest Doku, telecoms expert at uSwitch.com, welcomed the news and urged customers to take full advantage of the putative changes if they come into force.

He said: “When prices go up, many consumers would be better off switching, but currently have to stay put or risk hefty exit fees.

“If you're a mobile customer tied into a two-year phone contract, price rises have the potential to burn a sizeable hole in your pocket before you can leave.

Doku added: "Reading the small print is futile. Even those who religiously study their terms and conditions before signing up will find that all providers cover themselves for price increases in line with the RPI.

“It’s almost impossible to find a contract where prices are truly fixed for the length of your deal.

“The move Ofcom has proposed reflects the energy industry, which although often berated, allows customers to leave a contract without paying exit fees if prices rocket. Giving people the power to make their feelings clear by leaving if prices go up means providers will no longer be able to call the shots as soon as inflation hits.

“However it remains to be seen if this dream can become a reality. Even if all providers do get on board with the proposal, it’s likely that consumers could still be the victim of mid-contract price rises for the rest of 2013."

The consultation is set to end in March, with a binding decision due in June.

Category: News
Tagged: industry news

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