Readers like you keep news free for everyone.

More than 5,000 readers have already pitched in to keep free access to The Journal.

For the price of one cup of coffee each week you can help keep paywalls away.

Support us today
Not now

Ofcom sets out proposals to tackle mid-contract price rises

The regulator is considering introducing rules allowing customers to exit their contract without penalty if prices are raised in the middle of a contract term.

Image: Yui Mok/PA Wire

COMMUNICATIONS REGULATING AUTHORITY Ofcom in the UK today launched a consultation to discuss protection for consumers from price increases during fixed contracts for landline, broadband and mobile services.

Today the regulator said the proposed approach is to intervene to allow consumers to exit their contract without penalty if their provider introduces any price increase during the term of the contract.

Alongside this, Ofcom would expect 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 a price hike.

The consultation follows an Ofcom review into the fairness of certain contract terms enforced by service providers.

The review identified issues concerning clarity and effectiveness of the current rules which has led to consumer harm, Ofcom said today.

A complete ban on price rises in fixed contracts has also been considered by the regulating authority. However, Ofcom said it does not think this would be consistent with the European legal framework, so it is not presented as an option for consultation.

Making a difference

A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article.

Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

For the price of one cup of coffee each week you can make sure we can keep reliable, meaningful news open to everyone regardless of their ability to pay.

During the course of its review, Ofcom examined 1,644 consumer complaints made to the regulator about changes to terms and conditions during the period September 2011 to May 2012.

The analysis showed many consumers complained that they were not made aware of the potential for price rises in what they believed to be fixed contracts. Others complained specifically about the amount of the price increase and how it would affect them.

The regulator is now inviting all stakeholders’ views on the options before the close of the consultation in March and it is expected that the decision will be published in June.

Read: Ofcom launches investigation into both the BBC and ITV>

Read next: