Broadband and mobile contract providers will no longer be able to sell 'misleading' fixed price contracts that fail to inform shoppers that they'll face mid-contract price rises.
Currently, providers sell deals to customers on a fixed-term contract and mention in the small print that they can increase the price in line with inflation based on the Customer Price Index (CPI) or the Retail Price Index (RPI).
However, this came to a tipping point in the Spring, with broadband customers seeing their monthly payment increase up to 14.4%.
Unfortunately, mid-contract price rises will continue, but the UK Committees of Advertising Practice (CAP and BCAP) have set out new guidance for how providers should communicate mid-contract price rises, making such policies clearer and more transparent. They aim to have the new rules in place by the 15th December 2023.
Alex Tofts, broadband expert at Broadband Genie: "While the Advertising Standards Agency (ASA) does not have the power to ban mid-contract price rises, it can make sure that the public are made more aware of them and this is a positive step forward in that fight.
“When telecoms customers sign up to a contract, they expect to pay the same monthly price throughout, but only a handful of smaller providers commit to that promise.
“The problem for many is that these price rises are linked to inflation, as well as charges directly set by the provider. In a year that has seen inflation go above double digits, it means that most broadband, TV and mobile customers have seen price rises unlike anything they have experienced before on their telecoms bills.
“This new guidance will make sure that the deals you see and hear about give you clear information about the price rises you will face. Whether or not we see providers actually implementing these changes is another matter, especially as the ASA has set a deadline of six months from now and not suggested how it will enforce it.
“All eyes will now be on Ofcom to decide whether or not mid-contract price rises should be banned altogether. It is unfair for customers to continue to be put at risk of punitive charges, only to find that they cannot leave the contract because of the small print.
“If you have been hit by a price rise you can't afford, make a note of your contract end date and switch to a cheaper deal. You should also speak to your provider to make them aware of the problem to see if they can help in any way.”
More information about mid-contract price rises is available through our guide.
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