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No penalty for telecoms users who switch providers mid-contract

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23/01/2014
Landline, broadband and mobile phone users can now exit their contracts without being penalised if prices are hiked unexpectedly.

Under new rules from telecoms regulator, Ofcom, providers must allow customers to exit contracts without penalty if they increase the monthly subscription price agreed at the point of sale.

Providers must also give customers one month’s notice before they hike prices.

The rules also state that any changes to contract terms, pricing or otherwise, must be communicated clearly and transparently.

The move follows an Ofcom review into the fairness of contract price terms which found consumers were often caught unawares by price rises in what they believed to be fixed price contracts.

Claudio Pollack, Ofcom’s consumer group director, said: “We have reached an important milestone in our work to ensure consumers and small businesses have better protection against unexpected price increases.”

Dominic Baliszewski, telecoms expert at broadbandchoices.co.uk said the new rules should avoid providers using “any sneaky tactics” to reduce costs rather than increase revenues.

However, he highlighted that if customers do decide to switch following a mid-contract price rise, they will only have 30 days to do so

“Switching provider is very easy nowadays but we are concerned that some customers may miss their opportunity to switch if they miss the notification, for example if they are away for a few weeks on holiday,” Baliszewski said.

 Read our guide on how to switch broadband providers

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