Mobile phone companies banned from hiking prices mid-contract based on inflation

The new year plan ensures providers are transparent on prices at the point of sale

(Yui Mok/PA Wire)

From next year, mobile phone, paid television and broadband companies must inform customers of any price rises at the point of sale.

The changes, ordered by Ofcom, will come into force on 17 January and mean that any mid-contract price rises must be given “in pounds and pence” and in a “clear and comprehensible” way.

Ofcom estimated around six in ten broadband and mobile customers were on contracts subject to inflation-linked price rises up to April 2024.

The new requirement follows complaints from customers about unexpected price increments during the cost-of-living crisis.

A number of phone companies changed their contract terms over the past few years to include inflation-linked price changes – on top of a 3.9% standard increase.

Ofcom has changed the rules on hiking prices mid-contract (PA Wire)

Customers could not accurately budget for the contracts because of the unpredictable future price adaptions.

Cristina Luna-Esteban, Ofcom telecoms policy director, 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.”

The changes come after a regulator review in February.