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October 19, 2012

Ofcom initiative plans to protect consumers from mobile price rises

Ofcom announces plans to protect against fixed contract price rises for landline, broadband and mobile services.

By Tineka Smith

After a review earlier this year on consumer contract terms, Ofcom has found issues with communication providers complying with rules and the potential for consumer harm.

The review looked at 1,644 complaints about changes to terms and conditions about contracts. Consumers said that were not told about the potential for prices to rise in their fixed contracts.

Ofcom will consider if price variation in fixed term contracts are appropriate. The UK watchdog will also look at transparency and information provided to consumers about price variation when first signing contracts.

"Ofcom understands the frustration that consumers feel when faced with price rises in what they assume to be a fixed contract with a fixed price," said Claudio Pollack, Ofcom’s consumer group director.

Consumers told Ofcom that communications operators should not be able to increase their prices during a fixed contract. They proposed that if a provider does increase their price, a consumer should be able to leave the contract without a penalty.

"Having considered the large number of consumer complaints, we will soon consult on ways to address consumer concerns and ensure they are being treated fairly in this area," said Pollack.

Ofcom says it plans to release its consultation on protecting consumers from unexpected price increases in fixed contracts by the end of this year.

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