Ofcom to address concerns on mid-contract price rises


Regular to publish a consultation by the end of the year after a high number of consumers complain they were not made aware of potential price rises in fixed contracts 

Ofcom is to launch an investigation on how to protect customers from unexpected rises on fixed contracts following a number of complains from consumers.

The consultation, which is expected to be issued by the regulator before the end of the year, will address mobile, landline and broadband services.

It will consider whether price variation terms in fixed-term contracts are appropriate, and analyse issues including the transparency of price variation terms and the information provided to consumers at the point of sale.

Ofcom launched a review earlier this year looking at the fairness of certain contract terms, which identified a range of issues with the effectiveness of the current rules with which comms providers have to comply, and the possibility of harm to the consumer.

The regulator examined 1,644 complaints from consumers made to it during the course of the review about changes to terms and conditions from September 2011 to May 2012, alongside further evidence from product testing and consumer campaigning firm Which?

It showed that many consumers had complained they were not made aware of the potential for price rises in what they believed were fixed contracts.

Some felt that comms providers shouldn’t be able to impose such price increased during the course of a contract and if they were to, the consumer should have the right to exit the contract without penalty.

Other consumers complained about the amount of price increase and how it would impact them.

Ofcom consumer group director Caludio Pollack 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.”