Ts&Cs should be more lucid, less evasive
The UK’s broadband as a services (BaaS) providers have been accused of being devi-Aas, with the wording of their contracts nebul-Aas and their tactics unscrupul-Aas. Now UK regulator Ofcom has launched an industry-wide enforcement programme which could investigate mobile operators and broadband providers. The probe follows a consumer campaign that highlighted evasions about mid-contract price rises which were not ‘clearly advertised’ to customers.
Many consumers have complained that contracts drawn up between March 2021 and 2022 were not clear about the price hikes. Having analysed the evidence, Ofcom will now call for greater transparency on mid-contract price rises. However this is nothing new and no action was taken last time broadband providers did this. Campaigners have pointed out that Ofcom had already stated that if a provider wants to include a potential future price rise in a contract, the terms have to be detailed prominently and transparently at the point of sale.
If a customer did not agree to the terms when signing up, and this is deemed to be because the terms were not made with enough clarity and visibility, then providers should have both notified them about price increases and offered the option of exiting penalty-free, said consumer champion Which?. UK telecoms regulator Ofcom will collect further information from broadband providers to assess its next steps. It may then launch separate investigations into individual firms. With inflation at its highest rate in 40 years, 9.1 million UK households are struggling to afford their online, double the number April 2021.
Which? said broadband providers use a variety of calculations to work out price increases. Tesco Mobile has calculated that price continuity to the end of the contract is best – especially for its brand reputation. Broadband providers Hyperoptic, Utility Warehouse and Zen Internet have all maintained the integrity of their bond with the public, keeping prices the same for the full duration of the contract.
Many UK broadband providers inflate prices every year, even within the minimum contract period. Typically they will add an extra 3.9% on top of the inflation rate indicated by Retail Price Index (RPI) or the Consumer Price Index (CPI). Virgin Mobile and O2 customers are most at risk of the highest price rises at a 16.9% increase. BT Mobile, EE, Plusnet and Vodafone customers would also face steep increases of the CPI rate (11%) plus 3.9%, resulting in a 14.9% increase. Broadband customers with BT, EE, Plusnet, TalkTalk and Vodafone would also face a 14.9% increase, assuming the CPI is 11%.
A Which? campaign is calling on telecoms providers to help consumers grappling with the impact of the cost of living crisis. This includes carefully considering what level of mid-contract price rise is justified in the coming year, and enabling consumers to leave without penalty when prices are increased mid-contract. Which? is calling on telecoms firms to allow customers to leave their contract without penalty if prices are hiked mid-contract.
“Some customers who signed up for a broadband contract in early 2022 could see prices soar by up to £113 in 2023 due to mid-contract price rises,” said Rocio Concha, Which? Director of Policy and Advocacy. “It’s extremely concerning that these mid-contract price rises may not have been properly advertised to customers when they signed up and we’re pleased to see Ofcom investigate the issue,” said Concha.