{"id":33655,"date":"2023-02-09T09:24:50","date_gmt":"2023-02-09T09:24:50","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=33655"},"modified":"2023-02-09T15:32:30","modified_gmt":"2023-02-09T15:32:30","slug":"ofcom-uk-reviews-mid-contract-broadband-isp-price-hikes","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/02\/ofcom-uk-reviews-mid-contract-broadband-isp-price-hikes.html","title":{"rendered":"Ofcom UK Reviews Mid-Contract Broadband ISP Price Hikes UPDATE2"},"content":{"rendered":"

The UK telecoms regulator, Ofcom<\/a>, has today officially launched a new review that will finally examine whether inflation-linked mid-contract price rises give phone and broadband ISP customers “sufficient certainty and clarity about what they can expect to pay<\/em>.”<\/p>\n

In an ideal world, the price you pay when you first join 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\u2019t do that and will increase your prices mid-contract, often significantly. Indeed, many of the market’s largest ISPs (BT<\/a>, Vodafone<\/a>, TalkTalk<\/a> etc.) just hit consumers with hikes of 14-16% (here<\/a>).<\/p>\n

NOTE:<\/strong> Under Ofcom<\/a>’s rules, if an ISP 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 penalty free.<\/div>\n

The regulator has previously warned telecoms providers to seriously “consider whether large price rises can be justified at time of exceptional financial hardship<\/em>” (here<\/a>). But that had little impact and so, at the end of last year, Ofcom decided to take this a step further by announcing that they’d be gathering data to see if consumers have been “provided with sufficiently clear information about in-contract price rises<\/em>” (here<\/a>).<\/p>\n

Ofcom’s preliminary research found that around a third of mobile and broadband customers do not know whether their provider can increase their price. Among those who do know their provider can increase their price, around half do not know how this would be calculated. And nearly half of all customers do NOT know what CPI and RPI measure.<\/p>\n

As a result, the regulator has now decided to launch a formal review of the issue, which will examine it in more detail and see whether tougher protections are needed.<\/p>\n

Cristina Luna-Esteban, Ofcom\u2019s Director of Telecoms Consumer Protection, said:<\/strong><\/p>\n

“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\u2019re concerned that providers are making it difficult for customers to know what to expect.<\/p>\n

We\u2019re taking a thorough look at these types of contract terms, to understand fully the extent to which customers truly know what they\u2019re signing up to, and whether tougher protections are needed.<\/p>\n

In the meantime, there are some simple things many people could do today to cut their bills. Millions of customers are either out of contract or with a provider that lets them walk away if prices go up. So we\u2019re urging everyone to check their account and see what their options are.”<\/p><\/blockquote>\n

The new review will look specifically at the practice of in-contract price rises linked to inflation and percentage changes. But it’s important to note that general consumer law does not prevent companies from increasing their prices during the contract period. Many – but not all – providers choose to do this. Some give customers 30 days\u2019 notice and the right to exit penalty-free. Others specify price rises in customers\u2019 contracts from the start.<\/p>\n

The regulator has already launched a new industry-wide enforcement programme to monitor whether in-contract price rises were being set out clearly enough before customers signed up, thus the new review is somewhat of a complementary step.<\/p>\n

The Committees of Advertising Practice (CAP and BCAP) – sister body to the Advertising Standards Authority<\/a> (ASA) – is separately known to be developing new guidance that could require information about mid-contract price hikes to be more prominently stated in ads by broadband ISPs and mobile operators to \u201cavoid misleading consumers<\/em>\u201d (here<\/a>).<\/p>\n

Just in case it wasn’t already clear. The issue above, for both Ofcom and the ASA, isn’t so much that price hikes occur, but rather whether they’re being clearly, correctly and prominently communicated to consumers when they join.<\/p>\n

Finally, it\u2019s important to point out that broadband and mobile operators are NOT immune to cost increases. Providers, much like consumers, are also suffering under the burden of rising supplier and lease costs, as well as energy prices, the ever-rising levels of consumer demand for data and the cost of adding all sorts of new services (e.g. FTTP<\/a>).<\/p>\n

In the meantime, consumer who are hit by mid-contract hikes can always try haggling for a lower price when the notification drops (Retentions \u2013 Tips for Cutting Your Broadband Bill<\/a><\/strong>), although your mileage may vary. Meanwhile, those on benefits (Universal Credit<\/strong> etc.) also have the option of taking a cheaper Social Tariff<\/strong> – see our Quick Guide to UK Social Tariffs<\/strong><\/a>.<\/p>\n

UPDATE 10:40am<\/strong><\/p>\n

We’ve had the first comment.<\/p>\n

James Fredrickson, Hyperoptic<\/a> Policy Director, said:<\/strong><\/p>\n

“Over the last year, we\u2019ve been raising awareness of this issue directly to Ofcom, flagging the very real consumer harm being done here and encouraging them to take a harder line on the use of mid-contract price rises, so today’s announcement is extremely welcome.<\/p>\n

The solution is simple \u2013 customers should be made fully aware, from the beginning of their sales journey, of what they will have to pay for the length of their deal. There can be no more hiding behind small print. We’ll be proposing this principle in response to Ofcom’s review.”<\/p><\/blockquote>\n

UPDATE 3:31pm<\/strong><\/p>\n

Sky has added a comment.<\/p>\n

Stephen van Rooyen, CEO UK & Ireland and Group CCO, said:<\/strong><\/p>\n

“Sky welcomes the review from Ofcom into inflation-linked telecoms price rises. Sky does not pin customer price increases to inflation, as we don\u2019t believe CPI or RPI – which use the price of items including bin liners, beer and burgers – should determine people\u2019s broadband and mobile prices, or mean that they are locked into their minimum term contract.”<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

The UK telecoms regulator, Ofcom, has today officially launched a new review that will finally examine whether inflation-linked mid-contract price rises give phone and broadband ISP customers “sufficient certainty and clarity about what they can expect to pay.”<\/p>\n","protected":false},"author":1,"featured_media":21148,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1,1645],"tags":[99,36,38],"class_list":["post-33655","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","category-key_uk_isp_industry_developments","tag-asa","tag-ofcom-regulation","tag-politics"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nOfcom UK Reviews Mid-Contract Broadband ISP Price Hikes UPDATE2 - ISPreview UK<\/title>\n<meta name=\"description\" content=\"The UK telecoms regulator, Ofcom, has today officially launched a new review that will finally examine whether inflation-linked mid-contract price rises\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2023\/02\/ofcom-uk-reviews-mid-contract-broadband-isp-price-hikes.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ofcom UK Reviews Mid-Contract Broadband ISP Price Hikes UPDATE2 - 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