UK telecoms watchdog Ofcom is hoping to tackle the issue of mid-contract price hikes and allow customers to cancel their contract should pricing go up at some point during the agreement.
As it stands, customers wishing to break free from their contract may be subject to hefty cancellation fees if they're cancelling their agreement before it expires. However, Ofcom is hoping to protect consumers from price rises that occur during fixed contracts for landline, broadband and mobile services. The regulator's proposal would allow consumers to leave their contract with no penalty if their provider introduces any price increase during their contract. In addition, Ofcom would require providers to be clear about potential price increases and the consumer's right to cancel should a price increase be introduced during their contract.
"All communications providers must follow a set of Ofcom rules called General Conditions. Ofcom proposes to modify one of these rules (General Condition 9.6) to allow consumers to withdraw from a contract without penalty, if providers increase prices during the contract term," the watchdog explained today. "While it would allow communications providers to increase prices during a fixed-term contract, consumers would be free to leave the contract if they did not wish to accept the rise."
Ofcom has opened up a consultation on the idea, along with several other options for protecting customers from price hikes. These include service providers being more transparent about the potential for price increases or whether or not consumers should have to actively 'opt-in' to any variable price contract. While a complete ban on price hikes in fixed contracts would be nice, Ofcom says it doesn't think this would be consistent with European legal framework, so it is not presented as an option for consultation.
The consultation closes on 14 March 2013 and Ofcom expects to publish a decision in June 2013.