Ofcom launches review into telco price hikes


With most broadband providers set implement inflation-linked mid-contract price jumps, the regulator is set to investigate whether their customers are being sufficiently informed

Last month, following the publication of Office of National Statistics inflation data, most of the UK’s mobile and broadband operators confirmed that they would, as feared, be increasing their contract prices in line with inflation.

Customers can expect to be hit by an average mid-contract price hike of around 14.4%, most of which will come into effect between March and April this year.

But the question is, do customers know this increase is coming?

The legality of mid-contract price hikes is well established in consumer law, but how these increases are communicated to customers is highly varied. Some communication services providers (CSPs) include planned price increases in the fine print of the contracts themselves, while others typically give customers 30 days’ notice of any incoming increase to their bills.

But at a time when the cost-of-living crisis is piling pressure on consumers, Ofcom is keen to be especially vigilant to ensure customers know what they are getting into when they sign a connectivity contract.

In December last year, the regulator launched an industry-wide enforcement programme, seeking to ensure CSPs are making the pricing terms in their contracts both prominent and transparent.

The programme was built on the results of a preliminary investigation into the matter, which found that that around one in three customers did not realise their CSP could legally increase the price of their contract, with far fewer understanding how these increases would be calculated.

Now, Ofcom has announced that they will take this investigation process one step further, launching an official review into whether customers are given “sufficient certainty and clarity about what they can expect to pay”.

“Customers need certainty and clarity about what they will pay over the course of their contract. But inflation-linked price rises can be unclear and unpredictable. So we’re concerned that providers are making it difficult for customers to know what to expect,” said Cristina Luna-Esteban, Ofcom’s Director of Telecoms Consumer Protection. “We’re taking a thorough look at these types of contract terms, to understand fully the extent to which customers truly know what they’re signing up to, and whether tougher protections are needed.”

The review will particularly explore the ways in which inflation and percentage-linked price rises are communicated to customers.

Initial findings from the probe are expected to be published later in the year.

Are operators doing enough to support their customers during the cost-of-living crisis? Join the discussion with the UK’s telecoms ecosystem at this year’s live Connected North event

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