Ofcom says in-contract price rises need to be “crystal clear” for customers
Mid-contract price rises for mobile phone services must be communicated clearly to customers in “pounds and pence”, according to Ofcom.
The UK’s telecoms regulator is drafting new plans to end unforeseen hikes for monthly charges and has set strict guidelines for mobile phone operators.
Ofcom says customers don’t currently have “sufficient certainty” about the total cost of contracts at the point of sale.
Recent price increases linked to inflation prompted the regulator to review whether companies are blindsiding customers.
A review in February came to a firm conclusion: many customers are being “undermined” by sudden price hikes. The problem has become more acute during the last 18 months due to surging inflation.
Ofcom’s research found that 36m mobile customers and 40% of broadband customers have been affected by inflation-related price rises.
Operators have regularly upped costs by the inflation rate plus an extra 3.9%.
Ofcom says this tactic is “significantly more widespread” now than a few years ago.
The regulator’s chief executive, Dame Melanie Dawes, added that many customers are often baffled by the “sheer complexity” of contract details and pricing.
She noted: “At a time when household finances are under serious strain, customers need prices to be crystal clear.”
Ofcom now wants greater clarity for customers, which is a sentiment broadly supported in the industry.
Vodafone said it was its “ambition” to provide this clarity.
Ofcom will now hold a further consultation on its new proposals and is planning to make a final decision on how to proceed in March 2024.