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Addressing consumer concerns over mid-contract price rises

Ofcom today announced plans to consult on how to protect consumers from unexpected price rises within fixed contracts for landline, broadband and mobile services.

Ofcom launched a review earlier this year into the fairness of certain contract terms.

This has identified a number of issues with the effectiveness of the current rules with which communications providers have to comply, and the potential for consumer harm. 

The consultation, which Ofcom aims to publish by the end of the year, will consider whether price variation terms in fixed-term contracts are appropriate. It will look at related issues including the transparency of price variation terms, and the information provided to consumers at the point of sale.

Consumer Complaints

During the course of its review, Ofcom examined 1,644 consumer complaints made to the regulator about changes to terms and conditions during the period September 2011 to May 2012, alongside further evidence from Which?

Our analysis shows that many consumers complained they were not made aware of the potential for price rises in what they believed to be fixed contracts.

Some consumers 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 impact them. 

Claudio Pollack, Consumer Group Director, said: ‘Ofcom understands the frustration that consumers feel when faced with price rises in what they assume to be a fixed contract with a fixed price.

‘Having considered the large number of consumer complaints, we will soon consult on ways to address consumer concerns and ensure they are being treated fairly in this area.’

Next Steps

Ofcom plans to issue its consultation on ways to protect consumers from unexpected price rises within fixed contracts by the end of 2012.

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