Mobile, broadband, and pay TV companies will no longer be allowed to give surprise price rises in the middle of a customer’s contract as a regulator ban comes into effect.
In new deals from Friday, before somebody agrees to a contract, providers must tell them “in pounds and pence” about any price rises, as well as when they will occur.
It comes after increased complaints to Ofcom about large, unexpected price rises during a time when energy and other bills soared, meaning customers could not plan their budget properly.
But Citizens Advice said the move falls short of a full ban on prices rising mid-contract.
Many telecom companies have already changed contract terms in recent years to include price rises during contracts that were linked to inflation. This was usually on top of a 3.9% standard increase.
“In the time it’s taken to reach this point, billions have been added to bills at a time when we know so many are struggling”, said Citizens Advice’s director of policy, Tom MacInnes.
“It is clear already that there will be customers who will end up seeing bills not only rise above inflation but potentially by more than they would under the previous model”.
Meanwhile, Ofcom’s director for networks and communication, Natalie Black CBE, said that now, “more than ever, households want and need to plan their budgets.”
“Our new rules mean there will be no nasty surprises, and customers will know how much they will be paying and when, through clear labelling.”
Ofcom said it was unfair to expect customers to accommodate for surprise price rises linked to inflation, which measures price rises over time, and “can be incredibly volatile and… difficult to predict”.
Providers must now show information about increases “prominently” for customers’ attention, both during a sales call or in-store.
Ofcom began investigating the issue in 2023, and in its concluding report said that price increases communicated in an “unfair” way “could diminish consumer engagement, undermine confidence in the market and weaken competition”.
It said, as of April 2024, about six in 10 broadband and mobile customers were on contracts subject to inflation-linked price rises.
