Good news, Full story taken from ispreview
ispreview.co.uk/ind…tml
The UK telecoms regulator, Ofcom, has today launched a new industry-wide enforcement programme, which will monitor and examine whether in-contract price rises were being set out clearly enough by broadband ISP and phone providers before customers signed up.
In an ideal world, the price you’re asked to pay when you first sign-up to a new provider or package would remain the same until the end of your contract term, but as we all know – many broadband, phone and mobile providers don’t do that and will increase your prices mid-term, often significantly.
NOTE: According to Ofcom’s rules, if a provider included potential future price rises in the terms of a contract (e.g. CPI increases), then they have to be set out prominently and transparently at the point of sale. Failing to do this might allow customers to exit their contract penalty free.
Some providers (e.g. Sky Broadband and Virgin Media) approach this by doing a fairly static price increase each year, which can sometimes trigger Ofcom’s rule on mid-contract hikes and enable you to exit your contract penalty free (you won’t know what the increase will be, or when it might occur, until they announce it). But those hikes have not been as dramatic is some.
However, other providers (e.g. BT, EE, TalkTalk) write a policy into their contract terms that enables them to increase their prices each year by around 3-4% + CPI or RPI (inflation), which is more transparent. But the details are often hidden in the small print, and a lot of consumers don’t actually understand inflation all that well. On top of that, the extra transparency means you can’t exit your contract without penalty when the hike hits.
Ofcom has now decided to take a closer look, which comes after they analysed customer complaints that were made between 1st March 2021 and 16th June 2022, which they say indicates that some consumers “may not have been provided with sufficiently clear information about in-contract price rises, which are usually applied in March or April each year“.
Lindsey Fussell, Ofcom’s Networks and Communications Group Director, said:
“As millions of people are having to deal with rising household bills, it is more important than ever that telecoms companies don’t shirk their responsibilities and keep customers fully informed about what they are signing up to.
It’s vital that people are told clearly upfront about any future price rises they will face while they are in contract, and we’re investigating to check whether this happened in practice.”
Ofcom will now collect further information from a range of providers to assess the steps they have taken to make these terms prominent and transparent. “If we identify specific issues with providers complying with our rules, we may launch separate investigations into individual firms,” said the regulator. But such investigations tend to take a long time to reach completion, so it might be a while before we see some solid results from all this.
In the meantime, it’s worth noting that the Committees of Advertising Practice (CAP and BCAP) – sister body to the Advertising Standards Authority (ASA) – is currently known to be developing new guidance that would require information about mid-contract price hikes to be more prominently stated in ads by broadband ISPs and mobile operators to “avoid misleading consumers” (here). We suspect that this may have a more immediate impact, once the outcome is published in the near future.
It’s worth adding that the 16th June 2022 date mentioned earlier is no accident. Indeed, it reflects the fact that, since 17th June 2022, new, strengthened rules were introduced that require telecoms firms to provide customers with clearer and simpler information before they sign up to a new deal (here). In other words, everything after 17th would have to be judged in a different context of rules.
ispreview.co.uk/ind…tml
The UK telecoms regulator, Ofcom, has today launched a new industry-wide enforcement programme, which will monitor and examine whether in-contract price rises were being set out clearly enough by broadband ISP and phone providers before customers signed up.
In an ideal world, the price you’re asked to pay when you first sign-up to a new provider or package would remain the same until the end of your contract term, but as we all know – many broadband, phone and mobile providers don’t do that and will increase your prices mid-term, often significantly.
NOTE: According to Ofcom’s rules, if a provider included potential future price rises in the terms of a contract (e.g. CPI increases), then they have to be set out prominently and transparently at the point of sale. Failing to do this might allow customers to exit their contract penalty free.
Some providers (e.g. Sky Broadband and Virgin Media) approach this by doing a fairly static price increase each year, which can sometimes trigger Ofcom’s rule on mid-contract hikes and enable you to exit your contract penalty free (you won’t know what the increase will be, or when it might occur, until they announce it). But those hikes have not been as dramatic is some.
However, other providers (e.g. BT, EE, TalkTalk) write a policy into their contract terms that enables them to increase their prices each year by around 3-4% + CPI or RPI (inflation), which is more transparent. But the details are often hidden in the small print, and a lot of consumers don’t actually understand inflation all that well. On top of that, the extra transparency means you can’t exit your contract without penalty when the hike hits.
Ofcom has now decided to take a closer look, which comes after they analysed customer complaints that were made between 1st March 2021 and 16th June 2022, which they say indicates that some consumers “may not have been provided with sufficiently clear information about in-contract price rises, which are usually applied in March or April each year“.
Lindsey Fussell, Ofcom’s Networks and Communications Group Director, said:
“As millions of people are having to deal with rising household bills, it is more important than ever that telecoms companies don’t shirk their responsibilities and keep customers fully informed about what they are signing up to.
It’s vital that people are told clearly upfront about any future price rises they will face while they are in contract, and we’re investigating to check whether this happened in practice.”
Ofcom will now collect further information from a range of providers to assess the steps they have taken to make these terms prominent and transparent. “If we identify specific issues with providers complying with our rules, we may launch separate investigations into individual firms,” said the regulator. But such investigations tend to take a long time to reach completion, so it might be a while before we see some solid results from all this.
In the meantime, it’s worth noting that the Committees of Advertising Practice (CAP and BCAP) – sister body to the Advertising Standards Authority (ASA) – is currently known to be developing new guidance that would require information about mid-contract price hikes to be more prominently stated in ads by broadband ISPs and mobile operators to “avoid misleading consumers” (here). We suspect that this may have a more immediate impact, once the outcome is published in the near future.
It’s worth adding that the 16th June 2022 date mentioned earlier is no accident. Indeed, it reflects the fact that, since 17th June 2022, new, strengthened rules were introduced that require telecoms firms to provide customers with clearer and simpler information before they sign up to a new deal (here). In other words, everything after 17th would have to be judged in a different context of rules.
25 Comments
sorted byIt's mind boggling how long it takes for them to even open up an investigation, when anyone with common sense can see unfair practices have been going on for way too long.
They should be investigated for being utter useless muppets.
They (our government) hates rules, regulations, regulators, watchdogs and anyone or anything interfering with their or their mates and donors business.
They have deliberately undermined the powers and funding of most of them (regulators and watchdogs). That's why they are unable to do their jobs and control things, like we would want them to.
Lack of regulation has caused a lot of the problems we have had (building regulations and grenfell), and now face (water pollution). Yet they want to deregulate even more. Look how lax things are in America and how bad things are over there.
The real number is a lot higher on contracts with a large cashback as the increase is on the pre-cashback price.
Will the employees be getting 15% wage increases?? I doubt it...
These companies expect to have this right to increase prices mid contract without any regard to whether people can afford it. The irony is that these big companies can far more easily absorb a larger inflationary increase than most customers, so surely the rules should favour the customer not the telecom companies.
We as the population are often warned we should be careful with our money, don't spend beyond your means, have a contingency plan with some savings. But surely, given that business can more easily take a hit, why should we as customers have to carry the risk of a sudden price increase. Isn't that the whole point in taking a contract?? To protect yourself from a sudden change?
If you take a mortgage or energy, you can lock in for longer, pay a little more and be confident of no price increases.
Telecom companies seem to want the best of both, lock you in, and benefit from price rises, totally wrong.. (edited)
It’s funny how they are nearly all 3.9% + inflation.
The only reason consumers don't talk with their feet mid-term is because we're trapped with penalty charges if we want to. (edited)
as these service providers pick up increased costs every year to get the service to the consumer, pay rises, wholesale network charges etc all any OFCOM action will lead to is a more expensive starting point as this is exactly what got all the energy suppliers into trouble when they were being forced to sell something by Ofgem for less than it cost them to buy in which simply isn’t sustainable
The only way to dodge them it seems is to take an annual contract just after the rises in April.