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'Unpredictable' broadband and mobile price hikes should be banned, say Which? and Citizens Advice

Broadband and mobile firms should be banned from hitting their customers with unpredictable mid-contract price hikes, consumer group Which? and charity Citizens Advice have said. The organisations have urged the telecoms regulator to stop these "unjust hikes" to ensure people are given certainty about how much their contract will cost when they sign up. 

An estimated 8.4 million households in the UK will face mid-contract price hikes on their broadband bill in April next year, while 13.7 million UK adults will be subject to these hikes on their mobile bills, according to Which?

In a joint letter to telecoms regulator Ofcom, which you can read in full below, Which? and Citizens Advice say there is "no case" for allowing this practice to continue. MoneySavingExpert.com founder Martin Lewis has also repeatedly called for mid-contract above inflation hikes to be banned.

If you're currently out of contract, you're likely to be overpaying – see below for more on this and use our Broadband Unbundled and Cheap Mobile Finder tools to compare the latest deals and see how much you could save by switching.

'Unpredictable price rises must be stopped': Read the full letter from Which? and Citizens Advice

Melanie Dawes
Chief Executive, Ofcom
Riverside House
2a Southwark Bridge Rd
London, SE1 9HA 

27 November 2023

Dear Melanie,

As organisations championing consumer rights and digital inclusion, we have previously welcomed Ofcom's review of mid-contract telecoms price rises. Ahead of the review's imminent publication and consultation, we write to set out our collective view that unpredictable price rises must be stopped and that consumers need to know exactly what they will pay for their contract at the point of signing up.

As you know, the majority of communications providers have been implementing in-contract price rises, typically in the format of CPI or RPI plus a mark-up of 3.9%. Some providers also include contract terms which enable them to increase prices by any amount at any time during a contract. These terms effectively obscure the true price of contracts, harming consumers and fundamentally undermining competition by preventing customers from accurately comparing prices and planning their spending.

Ofcom's own consumer research found that six in 10 customers are unaware that CPI and RPI measure the rate of inflation, while Citizens Advice found that one in three people on contracts linked to CPI say they have never even heard of it. Research by Which? found that only one in 20 consumers (5.2%) are capable of estimating what impact inflation-linked mid-contract price rise will have on their monthly bill, and that people with a disability, lower levels of education or with lower incomes are more likely to find these terms hard to understand.

A groundswell of public support shows just how important pricing certainty is to consumers. Since October, over 88,000 people have signed Which?'s petition calling for clearer and fairer pricing while over 135,000 emails from consumers with this message have been sent to the CEOs of the communications providers. Polling by Citizens Advice found that four in five people (81%) support banning mid-contract price rises.

It is impossible for consumers to choose the right contract for their needs and effectively manage their household budgets without clarity on costs upfront. We strongly recommend that:

●  Consumers should have certainty about their monthly price and whole contract cost at the point of comparison and signing up.

●  Price rises linked to unpredictable figures must be banned within the terms of a contract.

For too long, providers have been unfairly allowed to place the burden of managing inflation risk on to their customers, which is an unusual practice in consumer markets. The clear evidence from our organisations is that it is impossible for consumers to predict the cost of contracts with ad-hoc or inflation-linked mid-contract price rises, and there is no case for allowing this practice to continue. We also recognise there are different approaches to giving customers the necessary clear understanding of the total cost of the contract. This could include prohibiting all price increases during the contract, or ensuring that if there are price rises the total contract cost is clear from the outset – options that Ofcom should consider as part of its consultation.

Ofcom's review of this issue is the strongest opportunity to finally ban these unjust hikes and ensure predictable prices and effective competition in the telecom market. We urge you to do all that is in your power to ensure consumers know exactly how much their contract will cost when they sign up.

Yours sincerely,

Rocio Concha
Director of Policy and Advocacy Chief Economist, Which?

Matthew Upton
Interim Executive Director of Policy, Citizens Advice

Mid-contract price hikes are being investigated by the regulator

Most major providers hiked prices above inflation earlier this year, with millions of people seeing increases of up to 17.3% on their monthly payments.

In February, telecoms regulator Ofcom launched a review into mid-contract price rises, amid concerns that providers weren't being clear enough about what customers can expect to pay during the full length of their contract.

In response to the call from Which? and Citizens Advice, an Ofcom spokesperson said: "Throughout our review, we've been engaging closely with consumer groups. In December, we'll be reporting on our findings and consulting on any changes to our rules that we consider necessary."

Check you're not overpaying on your broadband and mobile bills

Broadband and mobile firms have millions of customers who are out of contract and have simply been rolled on to often pricier tariffs without signing up for them. But if that's you, you can leave at any point penalty-free – and given the best broadband and mobile deals tend to be for newbies, there's a good chance you're overpaying anyway.

Here are our quick steps to cut broadband and mobile costs:

  1. Check if you're still in contract. An easy way to do this for mobiles is by texting INFO to 85075. This is free, and you should get a text back within seconds showing if you're out of contract (and therefore free to switch).

    For broadband, check your online account on your provider's website, or contact its customer services.

    If you're still in contract, diarise to shop around and find a new deal as your contract end date approaches. If you're out of contract, you're likely to be overpaying, so follow the rest of the steps below.

  2. Benchmark prices elsewhere. You can use our Broadband Unbundled and Cheap Mobile Finder tools to see what other deals are out there.

  3. Ditch and switch. In most cases, you just need to contact your new provider and it'll take care of the switch (though the process is different when switching broadband to or from Virgin Media – see our Cheap broadband guide for more info on this).

    Want to keep your mobile number? Text PAC to 65075. You'll be given a code to send to your new provider, which'll transfer your number for you within one working day (there's usually only a couple of hours of downtime).

  4. Want to stay with your existing provider? Try haggling. See if it will match or beat a deal you've found elsewhere. Telecom firms are consistently among the top companies to haggle with, according to our annual polls of MoneySavers. Our Broadband haggling and Mobile haggling guides have lots of tips on how to do this.

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