All except O2 have signed a deal with Ofcom and the government today that will see caps placed on stolen handset bills in spring 2014
EE, Three, Vodafone and Virgin Media have signed an agreement with the government today (December 3) that will see them cap bills on stolen mobiles.
Under the agreement, the operators will work with the government and telecoms regulator Ofcom to determine the level of the cap, which is expected to come into force in spring 2014.
The group has so far not suggested a level for the cap, but said it will work in a similar way to debit and credit cards, where there is a £50 liability cap.
Mid-contract price rises
The deal also sees all major operators – except O2 – agree to protect customers from mid-contract price rises by giving them the right to exit a contract without penalty if their provider increases its cost.
It follows Ofcom’s publication of guidelines in October confirming that consumers and small business will be able to exit their mobile phone, landline or broadband contracts early without penalty if their provider puts up prices (see here).
The guidelines, which come into effect early next year, also say customers must be given 30 days’ notice of any increase to their monthly subscription, even if it is in line with inflation.
O2 said that it had not signed the agreement because of the area relating to mid-term price rises, saying it wanted more clarity with regards to Ofcom’s proposals before giving its support.
It said: “We have a track record of delivering for consumers and we welcome any measures that improve transparency, clarity and fairness in consumer contracts. However one area of the Government’s announcement relates to Ofcom’s recently published guidance on ‘price rises in fixed term contracts’.
“We need clarity on what the guidance means for us and our customers before we can sign up to all the commitments referred to by Government and we have been unable to obtain such clarity from Government or Ofcom at the time of this publication.”
EE, Three, Virgin Media and Vodafone have also committed to help the government eliminate roaming charges by 2016.
The government said that although operators currently offer various roaming deals – such as daily rates, no charges when using partner services, contract prices that include roaming – it wants to go further.
On the agreement Culture Secretary Maria Miller said: “We are ensuring hardworking families are not hit with shock bills through no fault of their own.
“Families can be left struggling if carefully planned budgets are being blown away by unexpected bills from a stolen mobile or a mid-contract price rise.
“This agreement with the telecoms companies will deliver real benefits to consumers and help ensure people are not hit with shock bills.”
uSwitch.com telecoms expert Ernest Doku said: “This is a big step in the right direction towards better financial protection for mobile customers. The telecoms sector is lagging behind other markets when it comes to protecting customers, and the scourge of unauthorised calls has long needed tackling. With credit cards there is already a £50 limit for fraudulent costs, and we have urged Ofcom to introduce a similar cap on the cost of fraudulent calls in the mobile market.
“So the fact the Government has followed the example of Labour’s eight-point plan and recognised this potentially damaging part of the sector is welcome. Consumers need both the Government and Ofcom on their side – ensuring that if their mobiles are stolen, they don’t have to worry about the damage to their wallets too.
“However, there are gaps in the culture secretary’s plan that need to be addressed, with one big mobile operator, O2, not playing ball at the moment.
“Meanwhile an end to roaming would be a huge boost for mobile users jetting off abroad and worried about bills, while confirming Ofcom’s plans to enable people to exit contracts if prices go up will also help protect them financially.
“Unfortunately, the fact that networks have committed only to helping end roaming – as opposed to making a promise outright – gives them some wriggle room. But hopefully these plans will give consumers the protection they have long needed when it comes to mobile phone bills.”