The regulator said it had reached an important “milestone” today (January 23) by ensuring consumers and small businesses hit by mid-contract price rises can switch mobile provider without penalty.

Consumers and small businesses hit by mid-contract price rises can now switch mobile provider without penalty.

The decision, which was made by Ofcom last year but comes into effect today (January 23), is part of the regulator’s efforts to protect consumers from mid-contract price rises.

New guidelines state 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.

The guidance does not apply to price increases for services outside of the regular subscription price, for example international calls and premium rate numbers. However if these increase to the extent that it will have a “materially detrimental” impact on the consumer, providers should give them a chance to exit the contract.

It also does not apply to SIM-only and prepaid mobile services, or home broadband deals.
Ofcom said it will monitor providers’ application of the guidance and complaints closely to assess its effectiveness, and conduct research such as mystery shopping to assess the clarity of mobile phone contracts.

Consumer group director Claudio Pollack said: “We have reached an important milestone in our work to ensure consumers and small businesses have better protection against unexpected price increases.”

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