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The telecoms regulator has launched an investigation into whether companies are ripping off mobile and broadband customers by not telling them they could face bill hikes of hundreds of pounds when they sign their contracts.
Ofcom will investigate sales practices used in the UK telecoms market – which is dominated by BT, EE, Virgin Media O2, Sky, Vodafone, Three and TalkTalk – after customers were not told about mid-contract price rises when they signed up. .
Telecoms companies make billions of pounds each year by instituting price increases in mobile and broadband bills midway through the contract period, with many using the method of increasing annual prices by the rate of inflation as measured by the Consumer Price Index (CPI) in January. 3.9%.
Inflation is running at a 41-year high meaning customers signing up to a new two-year contract offered in some of the deals currently available over the Christmas period could find themselves paying up to £240 more than they thought.
“As millions of people face rising household bills, it’s more important than ever that telcos don’t shirk their responsibilities and keep customers fully informed about what they’re signing up for,” said Lindsay Fussell, Networks and Group Director at Communications Ofcom.
“It is important that people are clearly told about future price increases when they are in contract, and we are investigating to see if this has happened in practice.”
Ofcom said it was “concerned” after analyzing complaints that customers who took out broadband and phone contracts between March last year and June 16 this year “may not have been provided with clear enough information about price increases in the contract”.
At a government-led meeting this week to get telecoms to act on mid-contract price hikes, the regulator said its rules state that potential future price increases must be set “prioritized and transparently” at the time customers sign up.
Last month, the Committee of Advertising Practice (CAP) – which writes the code that all UK advertisers have to follow when running ads in any media from TV and newspapers to billboards and online – said the telecoms companies had completed the consultation phase of an investigation. Clearly telling consumers about price hikes in their campaigns.
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