Line contract get-out highlighted
Consumers should be allowed to leave their landline, broadband or mobile contract without penalty if their provider increases their monthly deal, Ofcom has announced.
The communications regulator said it was likely to regard any increase to a recurring monthly charge in a fixed-term contract as "materially detrimental" to consumers, and said providers should give at least 30 days' notice of any price rise and allow customers to leave without penalty.
Any changes to the contract, pricing or otherwise, "must be communicated clearly and transparently" to consumers.
The announcement follows a consultation on how to give consumers, including small businesses, a fairer deal in relation to price increases during fixed-term contracts.
The new guidance comes into effect in three months and will apply to any new landline, broadband and mobile contracts that starts after this time.
Consumers have faced being treated inconsistently, with some allowed to leave their contract without penalty following price increases while others have not.
Ofcom's consumer group director Claudio Pollack 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."
Watchdog Which? welcomed the announcement as an "overwhelming victory" for consumers.
Which? executive director Richard Lloyd said: "Consumers told us price hikes on fixed contracts were unfair, and now people will be able to leave these contracts and switch to a cheaper provider without being hit by extortionate exit fees."
David Hickson, of the Fair Telecoms Campaign, said he was "delighted to see the end of this nonsense".
He said: "Consumers must continue to be on their guard in respect of prices that do not form part of the subscription; for example, charges for calls that are not covered by the subscription fee. These are, however, still covered by the 'material detriment' provision.
"Ofcom has, however, made it clear that reductions in allowances covered by subscriptions will be regarded as a price increase."
Guy Anker, deputy editor at MoneySavingExpert.com, said: " It's ridiculous that mobile firms have got away with locking people into what are effectively marketed as fixed-rate deals that they can increase. At last, people will be able to ditch their provider if it imposes a price hike without being stung by a penalty.
"It's crucial that people take advantage of these new rules and dump their mobile provider, if it's no longer good value, as soon as any price hike is announced."