UK regulator Ofcom has clarified the rules that allow customers to withdraw from a fixed-term contract if there is any change likely to be of ‘material detriment’. It’s told fixed-line telephone, mobile phone and broadband service providers that any increase to the monthly subscription cost is likely to be regarded as such a change. Reducing the ‘bundle’ of calls, text messages or data included with a tariff would also be regarded as a price increase. However, increasing any other charges isn’t covered by this guidance.
The new guidance, which follows a consultation about fixed-term contracts, comes into force in three months’ time. It also emphasises that price increases need to have 30 days’ notice and points out that any changes to contract terms need to be communicated clearly.
Claudio Pollack, Ofcom’s Consumer Group Director, said “Ofcom is today making clear that consumers entering into fixed-term telecoms contracts must get a fairer deal. We think the sector rules were operating unfairly in the provider’s favour, with consumers having little choice but to accept price increases or pay to exit their contract. We’re making it clear that any increase to the monthly subscription price should trigger a consumer’s right to leave their contract - without penalty.”
[Ofcom statement]