Ofcom has launched an investigation into the rise in prices of telecommunications contracts for telephone and broadband due to concerns that they are “obscure and unpredictable.”
The study, released Thursday, suggests a monthly increase in April’s super-inflationary bills for millions of broadband and mobile subscribers.
The telecoms regulator said it was “concerned about the level of uncertainty consumers face about future price increases” specified in inflation-based contracts.
It turned out that every third client does not know whether and by how much their provider will increase the tariff.
“Inflation-related price increases can be unclear and unpredictable,” said Christina Luna-Esteban, Ofcom’s director of consumer advocacy.
“Even those who understand inflation and know its current level cannot know what it will be in the future,” she added.
The review follows pressure from consumer groups who have called on broadband companies to lift penalties for customers who go offline mid-contract for fear of imminent “exorbitant” price hikes or exit fees of more than £200.
Telecommunications companies typically base price increases on last year’s consumer price index (CPI) or consumer price index (CPI) plus an additional 3.9 percent. Mobile and broadband rates are expected to rise by more than 14 percent this year.
The regulator said it is “vital for clients to have sufficient confidence in the prices they will pay over the life of their contract” as households struggle financially. Ofcom said it expects to publish its first results later this year.
The Consumer Protection Act does not prohibit companies from raising prices during the term of the contract, and many do.
Some give customers a 30-day notice period and the right to cancel without penalty, while others set price increases in contracts from the start.
Ofcom is already looking into telco sales methods and customer contract information.
It also includes rules requiring telecommunications companies to treat financially vulnerable customers fairly. People who are having trouble paying their communication bills can contact their ISP for help. Depending on their circumstances, this could mean switching to a cheaper broadband package or a cheaper social plan, typically £12 to £20 a month, and granting a vacation or reprieve.
Matthew Upton of Citizen’s Advice said: “Ofcom is right to shed some light on the practice, but consumers need to act quickly before price increases spark inflation in April. What consumers really need is for Ofcom and the government to ban temporary price increases.”
Rocio Concha by Consumer Champions Which?said: “Our research has shown that many telco customers are trapped between costly mid-contract price increases and exit costs of up to £200, so it is only right that Ofcom is reviewing these inflation-driven price increases and checking that they are fair. consumers.
“Inflation has skyrocketed in recent months and since broadband contracts are typically 18 or 24 months, customers don’t realize how much prices could rise if they subscribe. Meanwhile, Which? Calls on suppliers to allow their customers to walk away without penalty in the event of a price increase at the same time and refrain from interim price increases for financially weak consumers until 2023.
“Since many households are trying to make ends meet, it is completely unfair that people are stuck in this situation. Telecom service providers must play their part and do their part to help their customers navigate the cost-of-living crisis.”
Source: I News
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