'Fair deal' for consumers proposed
Consumers will have new rights to pull out of phone and broadband contracts if providers increase prices on fixed deals under new proposals.
Ofcom has launched a consultation on how to protect customers from price rises during fixed contracts for landline, mobile and broadband services.
The regulator said its proposal would allow communications providers to increase prices during a fixed-term contract but mean consumers are free to leave if they do not want to accept the rise.
The consultation follows an Ofcom review into the fairness of certain contract terms.
It follows consumer concerns that they have little choice but to accept the increase or pay a penalty to exit the contract.
Ofcom said it would also expect providers to be transparent about the potential for price increases so consumers could make an informed choice when entering the contract.
It said it had also considered a complete ban on price rises during fixed contracts but believed this would be inconsistent with European laws.
Ofcom examined 1,644 complaints it received between September 2011 to May last year, finding that many consumers believed they were not made aware of the potential for price rises in what they believed to be fixed contracts.
Ofcom's consumer group director Claudio Pollack said: "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. Ofcom is consulting on rules that we propose would give consumers a fair deal in relation to mid-contract price rises."
Which? executive director Richard Lloyd said: "The day when fixed must mean fixed in mobile phone contracts is another step closer. That's a good start to the new year for the 38,000 people who supported our complaint to Ofcom about the giant phone companies hitting hard-pressed consumers with millions of pounds worth of unexpected price increases. The mobile phone companies should see the writing on the wall, bring in these changes now and start playing fair with their customers without waiting for the regulator to rewrite the rules."