Most mobile phone stores are misleading customers about the possibility of price increases on so-called fixed contracts, according to a watchdog.

A mystery shopping investigation by consumer group Which? found 82% of staff in stores it visited maintained the price was fixed throughout the term.

All shop assistants, when prompted, also claimed features would stay the same throughout the contract.

However, in the past year, four of the five main phone operators – Vodafone, Orange, T-Mobile and Three – had taken advantage of a "hidden clause" allowing them to increase prices on contracts that appeared to be fixed, citing rising inflation.

The group visited 39 O2, Orange, Three, T-Mobile, Vodafone, Phones4U and Carphone Warehouse stores.

Recent Which? research found 70% of people on fixed contracts did not know that mobile phone companies could increase prices during the length of their contract.

Fixed Means Fixed campaign

The watchdog, whose Fixed Means Fixed campaign calls on companies to ensure prices and all other aspects of the deal remain unchanged for the full length of the contract, says the practice is potentially netting the industry up to £90 million a year.

It is calling on operators to advertise the possibility of price rises upfront and allow customers to switch contracts without penalty if they do increase.

It has also complained to the regulator Ofcom.

Which? executive director Richard Lloyd says: "It's totally unacceptable that people aren't being told the full story about potential price rises when signing up to contracts in mobile phone shops.

"Shockingly, even when we asked directly about price increases, the vast majority of staff denied this could happen.

"There should be no nasty surprises after signing a mobile contract. People must be confident that fixed really does mean fixed."