Ofgem urged to tighten rules on mid-contract price rises

Ofgem must do more to prevent phone and broadband customers being hit with mid-contract price hikes, a minister has said.

In a letter to the watchdog, technology secretary Liz Kendall praised steps it has taken to increase transparency over how in-contract prices are presented in new contracts.

However, she said more needs to be done to ensure that customers are being treated fairly, especially given the “current pressures” on households.

“Driving down inflationary costs and protecting consumers are vitally important for this government,” Ms Kendall commented.

“I believe we need to go further, faster.

“I am keen that we look at in-contract price rises again.”

What has Ofcom done so far?

New rules to stop phone and broadband companies raising prices mid-contract without warning were introduced earlier this year.

Since January 17, telecom providers have been required to display any mid-contract price increases in ‘pounds and pence’.

This replaced the previous system, where price rises were linked to the inflation rate, with an extra 3.9% added.

However, this was not a full ban on prices rises mid-contract.

In response to Ms Kendall, Ofcom said: “We share the government’s concern that customers who face price rises must be treated fairly by mobile providers and they are empowered to exercise their right to switch penalty-free if they didn’t agree to them upfront.

“We will respond to the secretary of state’s specific queries shortly.”

What should you do if you can’t afford mid-contact price rises?

If you can’t afford to pay mid-contract price rises, you can try to cancel your contract, switch providers or negotiate a better deal.

Whether you can cancel your contract mid-term or move to a different provider depends on what it says in your terms and conditions, and you may have to pay an early exit fee.

Check your contract to see what you can and can’t do or speak to your provider and explain your situation. 

If you’re eligible, they might be able to move you onto their social tariff to help you save money.

What happens if I fall behind with my broadband or mobile bill payments?

Mobile phone contracts are usually considered non-priority debts because falling behind on payments can lead to your service being cut off, but won’t result in you losing your home or essential service.

If you continue not to pay, your debt might be passed to a collection agency and could result in legal action. 

Unpaid mobile phone debts could also harm your credit score and affect your chances of being accepted for credit in the future.

If you have fallen behind with payments - either priority, non-priority or both - speak to us for debt advice. 

We can help you work out a plan to prioritise payments, negotiate with creditors or find the best debt solution based on your circumstances.