Mobile phone firms’ marketing plans could be thrown into disarray by an Ofcom proposal to allow customers on contracts of up to 36 months to cancel their deals without penalty if their operator raises prices.
The regulator wants to ensure consumers are not forced into paying higher rates during a contract after being bombarded with 1,644 complaints over this practice between September 2011 and May 2012.
Contract deals form the basis of most marketing activity in the sector, but in a consultation document, Ofcom is proposing to make it possible for users on mobile contracts – as well as fixed-line and broadband subscriptions – to be able to cancel if prices are raised.
It also wants providers to be more upfront and transparent about the potential for any price rises and the consumer’s right to cancel if this happens.
“Many consumers have complained to us that they are not made aware of the potential for price rises in what they believe to be fixed contracts,” said Claudio Pollack, Ofcom’s consumer group director. “Ofcom is consulting on rules that we propose would give consumers a fair deal in relation to mid-contract price rises.”
The regulator has had to rule out banning contract increases altogether, though, as it believes this would contravene European business laws.
Ofcom expects to publish a decision based on the responses to its consultation in June.
