New rules come into force on Friday (January 17) requiring mobile, broadband and TV package providers to share with customers when and by how much prices will increase in the year
When it comes to household bills, it’s not often any good news arises. However, according to an expert in regulatory matters, there’s cause for optimism amid changes being enforced in the way we pay for our broadband, mobile phone and TV package contracts.
Self-acclaimed The Regulator Guy says a new mandate comes into force tomorrow (Friday, January 17) whereby from this date, “any new contract that is signed, your provider will have to tell you in pounds and pence figures your prices rises are going to be each year – and when they are”.
He explained in a TikTok video that previously, prices hikes were incorporated in April each year – in line with inflation. “It was usually inflation from December plus 3.9% – so when we had around 12% inflation, we’d get around 15% increases on our bills, which left everyone outraged,” The Regulator Guy detailed.
Now, however, Ofcom’s ruling requires firms to share the exact amount your bills will go up in the middle of the contract – rather than linking it to inflation – a figure that is unpredictable.
So how will that benefit the consumer? “Your contract price is clearer,” The Regulator Guy elaborated. “You can easily calculate the total value of that contract because you’ll know how much it is going up by and when it’s going up – rather than waiting for inflationary figures to be released.”
Whilst this makes it easier to compare potential contracts between providers, there is significant drawback, however. “We’re therefore not likely to look at inflation figures when they come and determine whether or not our providers have increased more or less than the inflation – meaning we won’t know if our contracts are in fact more or less expensive,” The Regulator Guy added.
He further explained though that Ofcom will keep an eye on the situation, adding, “if needs be, we can approach them and say, ‘actually we’re worse off now’.” For those hunting for a new contract, his advice is to “wait until the weekend – January 17th and 18th – when at the very least you’ll have more clarity over your contract bills.”
Despite being billed as positive news, TikTok users appeared up in arms in their response, with one user insisting: “Price rises during contracts should be banned, that’s the whole point of a contract.”
Another user was equally critical, saying: “The whole practice of increasing prices should be illegal,” while a third lamented: “Contracts are worthless if the price is not fixed for the contract duration. Price increases during the contract term are basically a legally sanctioned scam.”
Whilst a third disgruntled individual claimed: “This has actually made the increase higher than what it would have been as a %. Typical Ofcom own goal we need proper regulation and the scrapping of mid contract rises completely.”
It comes after Cristina Luna-Esteban, Ofcom Telecoms Policy Director, announced last year: “With household budgets squeezed, people need to have certainty about their monthly outgoings. But that’s impossible if you’re tied into a contract where the price could change based on something as hard to predict as future inflation.”
She added, “We’re stepping in on behalf of phone, broadband and pay TV customers to stamp out this practice, so people can be certain of the price they will pay, compare deals more easily and take advantage of the competitive market we have in the UK.”
