New regulations by Ofcom require UK telecom providers to clearly state any future price increases in pounds and pence, eliminating the ambiguity of inflation-based hikes. This aims to empower consumers with transparent pricing information and prevent unexpected cost surges.
Household telecoms bills must now set out contract price rises in pounds and pence to prevent the “nasty surprises” of inflation-based hikes. Phone, broadband and pay TV providers are now banned from linking price rises to future rates of inflation, which often include an extra percentage increase on top, and which made it near impossible for consumers to accurately estimate what they would pay.
However, while the new rules ban inflation-linked price rises, they still allow for annual mid-contract increases by a fixed amount. Last April many deals rose by 7.7%, in line with the Consumer Price Index announced in February as 4% plus an additional 3.9%. Other deals rose by up to 8.8% in line with the Retail Price Index, which was 4.9%, plus 3.9%.
Any price rises written into a customer’s contract also now need to be set out “prominently and transparently”, at the point of sale. Providers must also be clear about when any changes to prices will occur. Several providers offer contracts that do not contain price rises, while others offer deals that allow for unspecified price rises during the contract period. If they do this, they must give customers 30 days’ notice and the right to exit penalty-free, so consumers can avoid the increase.
Business TELECOMS PRICERISES INFLATION OFCOM CONSUMER PROTECTION
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