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New Ofcom guidance on mid-contract price hikes starts tomorrow

From tomorrow, any customers taking out a new landline, broadband or mobile contract, will be allowed to cancel their service without penalty if their provider increases the price of their monthly subscription.

By on January 22, 2014 at 15:00 PM
New Ofcom guidance on mid-contract price hikes starts tomorrow

Ofcom will be putting into effect its new guidelines for mid-contract price rises starting tomorrow, January 23rd 2014. Customers signing up to new deals after this date will be able to leave their contract without penalty if their provider ups the price of their regular monthly bills. 

The guidance is more of a clarification than a set of new rules, but it ensures that providers will now give their customers at least one month notice of any price increase, during which time they will be allowed to exit the contract. 

The same rules apply for anything that is "likely to cause material detriment" to the customer. For instance, a mobile network won't be able to reduce a customer's call, text or data allowance in order to effectively increase the price of a contract. 

Claudio Pollack, Ofcom's Consumer Group Director, said:

We have reached an important milestone in our work to ensure consumers and small businesses have better protection against unexpected price increases. Additionally, our new guide highlights important factors customers might want to consider before entering into a new contract to help them understand exactly what they are signing up to.

Ofcom will be monitoring how the new guidance is used and will be continually assessing how effective the guidelines are. They will also be performing mystery shops to make sure providers are being as transparent as possible about their monthly contracts. 

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