Watchdog looks into broadband prices as mid-contract inflation hikes hit hard-pressed households
Controversial broadband and phone contracts that allow customers to be hit with inflation-linked price rises while the agreements still have time to run are in the sights of the UK’s media market watchdog.
After a rise in the number of complaints from consumers, Ofcom launched a review into whether the contracts give householders “sufficient certainty and clarity” over their bills. The regulator said these in-contract price rises were introduced in 2021 by “a number of telecoms firms”, with “many but not all” companies now using them.
Cristina Luna-Esteban, Ofcom’s director of telecoms consumer protection, said these contracts could be “unclear and unpredictable,” adding: “We’re taking a thorough look at these types of contract terms, to understand fully the extent to which customers truly know what they’re signing up to, and whether tougher protections are needed.”
The extent to which the clauses can lift bills has risen in line with double-digit inflation, which sparked the cost-of-living crisis via soaring energy costs after Russia’s invasion of Ukraine.
Ofcom’s research showed that “around a third” of mobile and broadbandcustomers don’t know whether their provider can lift prices within the lifespan of the contracts. Half had no idea how any rise would be calculated.
It added: “At a time when household finances are already under significant strain, it is vital for customers to have sufficient certainty about the prices they will pay over the course of their contract. Even for those who do understand inflation and are aware of its current level, it is not possible for them to know what it will be in the future.”