Fixed mobile contracts now means fixed

Posted by Sam Twyford in Personal Finance on 6 November 2013 - Sam is a Product Manager at checkmyfile

The UK's independent communications regulator, Ofcom, has announced a new ruling whereby customers can cancel their existing contracts if the provider offering fixed fee contracts increases prices during the minimum term of the agreement.

Over the past 12 months nearly all mobile phone providers have increased their prices during a fixed term contract, prompting a number of complaints to Ofcom.

Ofcom’s recent announcement has meant that UK mobile and landline network providers would have to give 30 days' notice to customers if they wish to increase the monthly price, although increases in VAT rate changes or other mandatory legal requirements would be allowed to happen without notice. Ofcom has also investigated ways around this move and confirmed that reducing the call and/or text and/or data allowance included within a monthly subscription would also be considered as a 'price increase'.

This move will allow the customer to cancel within the 30 day period without penalty and be free to take out a new contract whether it be with the same network or one of its competitors.

Previously, when wanting to cancel an existing contract, the customer would usually be charged for the remainder of the contract in full. Due to the lack of transparency in current contracts, many have been caught unaware of price rises and have not been given the correct information if wishing to cancel the contract early.

This sparked a campaign by Which? called Fixed means Fixed which led to 59,000 people signing a petition pushing for early exits on contracts if the price terms are increased, without the customer being penalised.

Richard Lloyd of Which? says, “Today’s announcement from Ofcom is an overwhelming victory for the 59,000 people who joined our campaign calling for fixed to mean fixed on mobile phone contracts. 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.”

Sam

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