Ofcom poised to outlaw mid-term price hikes on mobile contracts

Customers will also get right to cancel without penalty charge

Mid-contract price hikes for millions of UK mobile users will become a thing of the past under plans by the country’s regulator Ofcom to outlaw the practice. At present customers on contracts involving monthly billing can only cancel if price rises cause “material detriment”, a legally untested term, otherwise they are invariably obliged to continue paying until the deal ends or face an exit penalty.But Ofcom, which has been deluged with complaints from more than a thousand disgruntled users who thought they were on fixed price deals, is now taking up the cudgel on their behalf.

Though it is allowing mobile operators to have an input, it otherwise plans to allow customers to end such contracts mid term should they be dissatisfied with any sudden price increases.

A ban on price rises in more clearly defined fixed contracts had also been considered by Ofcom, though it now thinks this would be inconsistent with European law.

The measures, expected to come in soon after Ofcom reaches a decision around June, will also cover fixed line and broadband contracts.

But Britain’s second largest operator Vodafone has already criticised the plans, claiming it could lead to an overall increase in contract charges.

A spokesman said the changes could generate “significant confusion” and result in the upfront cost of such deals increasing as operators try to out-guess what others will charge.

Operators have also argued that some prices rises are a result of similar increases from their own wholesale service providers.

Vodafone, along with competitors O2, Orange, T-Mobile and Three have all announced price rises of between 2.4 and 4.34 per cent in the last 14 months, adding an estimated £150 million a year to consumer bills.