From Thursday 23 January, consumers and small businesses taking out new landline, broadband or mobile contracts should be allowed to exit the contract without penalty if their provider increases the monthly subscription price agreed at the point of sale.
The new Guidance follows an Ofcom review into the fairness of contract price terms which found that many consumers, in particular, were caught unawares by price rises in what they believed to be fixed price contracts.
To improve protection for consumers and small businesses, Ofcom has issued new Guidance for providers which takes effect from 23 January. This can be found here (link no longer available).
The Guidance sets out that if a provider wishes to increase the monthly subscription price (or prices) agreed by the customer at point of sale, customers should be given at least one month’s notice of the increase and be allowed to exit the contract without penalty. It also states that any changes to contract terms, pricing or otherwise, must be communicated clearly and transparently.
Ofcom will monitor providers’ application of the Guidance and complaints closely to assess the effectiveness of this new protection and will also conduct research, such as mystery shopping, to assess the transparency of contractual information given to customers by providers at the point of sale.