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Ofcom to clamp down on mid-contract price rises

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03/01/2013
Consumers may soon be able to exit fixed contracts for landline, broadband and mobile services without penalty, if prices go up mid-contract.

Ofcom has started a consultation in response to customer concerns that it is unfair providers are able to raise prices, leaving consumers with little choice other than to accept the increase or pay a penalty to exit the contract.

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

Many consumers complained they were not made aware of the potential for price rises in what they believed to be fixed contracts.

Some felt that communications providers should not be able to impose price increases during the life of a contract, and, if they do, the consumer should be able to exit the contract without penalty. Others complained specifically about the amount of the price increase and how it would affect them.

However, a complete ban on price rises in fixed contracts has been ruled out by the regulator, on the basis it would go against the European legal framework.

Ofcom’s Claudio Pollack said: “Many consumers have complained to us that they are not made aware of the potential for price rises in what they believe to be fixed contracts.

“Ofcom is consulting on rules that we propose would give consumers a fair deal in relation to mid-contract price rises.”

The consultation closes on 14 March 2013 and Ofcom expects to publish a decision in June 2013.

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