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Ofcom examines options for customers facing mid-contract tariff hikes

4 Jan 2013

UK telecoms regulator Ofcom has launched a consultation regarding the possibility of allowing landline, broadband and mobile subscribers to exit post-paid contracts without penalty if a provider increases prices during the term of the contract. Under the watchdog’s proposals – which relate to General Condition 9.6 – it notes that operators would remain free to revise pricing for services offered on a fixed-term basis, it would simply be that customers would be free to withdraw from the contract if they did not agree with the changes.

Other options have, meanwhile, been put forward, with Ofcom noting that there are ‘three other possible approaches to address price rises in fixed term contracts’, including one option where customer would be required to actively ‘opt-in’ to any variable price contract. The regulator has though suggested that these alternatives ‘are unlikely to be sufficient to address the consumer harm identified’, while it also notes that, while a complete ban on price rises in fixed contracts had also been considered, it does not believe such a move would be ‘consistent with the European legal framework’, and as such has not presented it as an option for consultation.

The regulator has now invited comment from stakeholders on the proposals, with the consulation set to close on 14 March 2013; a decision is expected to be published in June 2013.

Claudio Pollack, Ofcom’s Consumer Group director, said of the matter: ‘Many consumers have complained to us that they are not made aware of the potential for price rises in what they believe to be fixed contracts … Ofcom is consulting on rules that we propose would give consumers a fair deal in relation to mid-contract price rises.’

United Kingdom, Ofcom

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