Mobile phone customers will be able to leave their contracts mid-term without paying a penalty if their provider puts up prices, the regulator has confirmed.Ofcom said that customers must be given 30 days notice of any price rise in their monthly subscription - even if it is within the level of inflation.
A provider must then allow a customer to exit their contract without a penalty.
Mid-term price rises are allowed, but must be made clear to consumers.
There are no specific changes to the rules, but the way they were interpreted has differed among providers. The regulator decided to offer guidance to providers to make it clear exactly how they should behave, and encourage competition. This will take effect in three months time and will apply to any new mobile, landline and broadband contracts, including some bundled contracts, entered into from that point in time.
Ofcom is today making clear that consumers entering into fixed-term telecoms contracts must get a fairer deal, said Claudio Pollack, Ofcom consumer group director.
We think the sector rules were operating unfairly in favour of the provider, with consumers having little choice but to accept price increases or pay to exit their contract. We are making it clear that any increase to the monthly subscription price should trigger a consumer the right to leave their contract - without penalty.
The consumer group Which? has campaigned for clarity from the regulator. Consumers told us price hikes on fixed contracts were unfair, and now people will be able to leave these contracts and switch to a cheaper provider without being hit by extortionate exit fees, said Richard Lloyd, executive director at Which?
But even if this move does not stop prices going up, at least consumers will be able to vote with their feet and say no to higher bills by moving to a new deal.
And consumers can keep their mobile phone number if they do switch to a new provider, they will need to obtain their PAC code, full information is available at PACcodes.co.uk
We expect a response to this from the main providers, Vodafone, Three, O2, EE, Orange and T-Mobile soon. The Carphone Warehouse will also be commenting, as the UK's largest independent provider of mobile phones.
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