From today  these new rules come into force and your free to switch if your prices are increased.

All parties involved have agreed to do this.

The new rules mean that providers are still free to raise prices, but they have to give a month's notice if they do so.

Customers who decide to switch provider as a result will not have to pay an exit fee.

The same applies if the provider reduces the number of minutes, or the amount of data provided, rather than actually increasing the charges.

Important Note. Customers only have 30 days to switch, after they receive notice of the increase.


See: http://www.bbc.co.uk/news/business-25847014

bbb_uk wrote on Jan 25^th, 2014 at 1:26pm:

It always was in the t&c, the problem is that it was not drawn to the attention of customers and that often, when they asked, customers were told the price was fixed, despite what it said in the t&c. I suspect the difference now is that suppliers will state that the price will increase with inflation, not that it might, and ensure that customers explicitly agree to this (which is fair enough, IMO).

There are two significant points here.

Firstly, there is the issue of transparency and clear pricing. That appears to have been addressed, although there may be a question of the prominence with which the O2 price increases are declared.

The second point relates to the effective and lively competitive marketplace, which Ofcom has a duty to maintain. All consumers should benefit from a marketplace, not just those who make it work by continually switching providers, or being new entrants. Whilst it is reasonable for providers to reward long term commitment by discounts, it is absurd to demand a commitment so long that the effect of general inflation on provider costs has to be considered in setting prices. Each period of commitment must surely be at a fixed price, with options to exit from the arrangement being equal for both sides.


I see the problem with the contract mobile market arising from the fact that two quite different items are bundled together - the lease of a handset and the provision of network service.

It is the necessary duration of the former which creates the problem with the pricing of the latter. I believe that some work needs to be done on the possibility of splitting the two, and furthermore on setting a fixed charge for network connection for voice calls and texts, separated from call charges.


May one assume that O2 staff and suppliers have contracts which allow them to increase their remuneration and prices in line with the RPI? In economic terms this is disaster, as it denies any check on the spiral of inflation.

"Three and Vodafone will not be following O2’s move to add mid-term price rises to new and upgrading customers’ contracts."
- See more at: http://www.mobiletoday.co.uk/News/28003/three_and_vodafone_back_ofcom_ruling_on_...

Dave wrote on Jan 30^th, 2014 at 12:38am:
If someone challenged it enough I believe they could still exit a contract because it wasn't wrote into the contract that a price rise would happen thereby implying the contract is fixed.

Quote:
That's all they have done but that still doesn't explain Ofcom's first paragraph (as I quoted) which implies no price rises now.

Quote:
I thought likes of fixed rate saving and fixed gas/electricity is actually fixed as I've never known them to then change rates mid way through a contract, unless it's variable rate which then isn't generally a contract so can switch anytime and they have names like "variable rate" to make it clearer.

Now compare this to teleco's that never openly admitted contracts would rise mid way (with some not evening mentioning they would rise in t&c) but yet they still wanted to raise it anyhow.

It's unfair to omit something (like prices will increase) when selling a mobile contract for example but still increase it anyhow.

I personally don't think sales persons are going to draw attention to the fact that prices will rise mid contract before the contract is signed by us customers.

There is also the issue that customers that are aware prices will rise still wont know by how much by so that creates uncertainty which Ofcom claimed they were trying to avoid!!

Yes, I agree inflation has to be taken into account but be upfront and honest and not just increase it without warning  consumers in advance of them signing a contract.

Gas and electricity fixed prices are generally higher the longer the contract so they take into account inflation, etc.

Basically what would be fair is that sales persons inform potential customers that prices aren't fixed and may rise by an unknown amount (which it technically is) BEFORE a contract is signed thereby stopping the misleading practice of consumers thinking the price quoted is for the life of the contract.