THE exact date a major rule change affecting millions of mobile, broadband and TV customers is set to come into force has been revealed.
Regulator Ofcom said that it would ban mobile phone carriers and broadband providers from linking prices to high inflation figures in the middle of a customer’s contract.
Prices can still go up, but instead, they will be expressed in pounds and pence, giving customers a clearer idea of how much more they might pay.
Plus, increases will have to be set out at the time that you sign up to the deal and can’t be sprung on you suddenly.
Rules from the watchdog said, from January 17 next year, mean any price rises in a contract will need to be laid out in pounds and pence.
Many major phone, broadband and pay TV companies now link their price rises to future inflation rates.
It means millions of customers faced hikes of up to 8.8% this year — adding as much as £50 to bills.
That “unfairly” puts the burden of shouldering inflation costs onto customers, Ofcom said.
It said that people “cannot predict” inflation and “do not understand (it) well.”
“We have decided to ban this practice,” the regulator said.
Firms had previously argued that they need to be able to increase prices to keep up with rising costs, but consumer experts have previously branded the rules “confusing” and “sneaky”.
It is confirmation of rules that the regulator said that it was looking at in December last year.
Ofcom telecoms policy director Cristina Luna-Esteban said: “With household budgets squeezed, people need to have certainty about their monthly outgoings.
“But that’s impossible if you’re tied into a contract where the price could change based on something as hard to predict as future inflation.
“We’re stepping in on behalf of phone, broadband and pay TV customers to stamp out this practice, so people can be certain of the price they will pay, compare deals more easily and take advantage of the competitive market we have in the UK.”
But Tom MacInnes, interim director of policy at Citizens Advice, said while the change is welcome, customers could still be caught out.
He said: “Mobile and broadband customers have faced years of unfair, unpredictable and above inflation mid-contract price rises.
“The announcement today falls short of a full ban on prices rising mid-contract.
“This means that customers might still end up being caught out by above inflation rises in April next year.”
NOT happy with your current mobile phone deal?
If you’re outside the minimum term of your contract then you won’t need to pay a cancellation fee – and you might be able to find a cheaper deal elsewhere.
But don’t just switch contracts because the price is cheaper than what you’re currently paying.
Take a look at how many minutes and texts, as well as how much data you’re using, to find out which deal is best for you.
For example, if you’re a heavy internet user it’s worth finding a deal that accommodates this so you don’t end up spending extra on bundles or add-ons each month.
Also note that if you’re still in your contract period, you might be charged an exit fee.
Ready to look elsewhere? Pay-as-you-go deals are better for people who don’t regularly use their phone, while monthly contracts usually work out cheaper for those who do.
It’s worth using comparison websites, such as MoneySupermarket and uSwitch.com, to compare tariffs and phone prices.
Billmonitor also matches buyers to the best pay-monthly deal based on their previous three months of bills.
It only works if you’re a customer of EE, O2, Three, Vodafone or Tesco Mobile and you’ll need to log in with your online account details.
There’s also MobilePhoneChecker, which has a bill monitoring feature that recommends a tariff based on your monthly usage.
If you’re happy with your provider then it might be worth using your research to haggle a better deal.
Some providers have already made moves to get ahead of the new Ofcom price rise rules.
Plusnet will apply a flat rate charge for all broadband customers, increasing by £3 a month each year.
The changes will be implemented on March 31 each year, so if you pay £30 a month now, that will go to £33 in 2025 and £36 in 2026.
Previously they increased by the rate of inflation plus 3.9%.
Meanwhile a 5% rise will apply to out-of-bundle services.
Likewise, broadband and mobile coverage from EE and BT will take a similar route.
EE Mobile deals will rise by £1.50 a month along the same annual structure.
Users of connected devices, including laptops, tablets and smartwatches, will see the same increase.
This will be £2 for TV customers and £3 for broadband, with the same 5% rise in out-of-bundle prices.
Vodafone will inform customers upfront about the exact cost of their contracts in pounds and pence, including when price rises will occur, from July 2.
For instance, customers who sign a contract in August 2024 will still see their bills adjusted in April 2025 and then again in April 2026 by a predetermined amount:
It will charge £1 a month more for phone coverage and £3 for its broadband.
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