Uswitch comments on Ofcom’s new rules on short and simple contract details

Uswitch comments on Ofcom’s new rules on short and simple contract details

Richard Neudegg, Head of Regulation at Uswitch.com, comments: “Ofcom has finally implemented the requirements of European Electronic Communication Code that aim to tackle some of the confusion around mid-contract rises - but this update still does not address the fact that the price of your deal can change in a way it’s impossible to guess. 

“The new guidance suggests telecoms contracts should offer a summary with illustrative examples of mid-contract increases, showing the real impact on future bills in pounds and pence. That added clarity is a start, but there is no way of predicting what the exact figure will be, as illustrated by the current situation of dramatic inflation-linked rises.

“The majority of consumers are unaware of what the latest inflation figures are, and whether their provider uses the Consumer Price Index or Retail Price Index to calculate their bill rises[1]. Expecting them to monitor these is simply unrealistic and, while it’s now suggested that providers at least tell customers which index will be used, the examples offered will be months out of date. The last year has shown how quickly the inflation rate can change, with the most recent RPI rate for April 11.1% - yet back in April 2021 it was 2.9%. 

“The telecoms watchdog should look to implement a system for mid-contract rises that is fair and transparent to the consumer and enables them to plan for future bills with confidence. Instead of grasping the nettle and removing inflation from bill calculations, this update is just window dressing.  

“As long as the regulator continues to allow providers to link price rises to an unpredictable yardstick like inflation, consumers will not get the full transparency they deserve when signing up to a new broadband, TV or mobile deal. This is even more crucial during the cost-of-living crisis. 

“As things stand, this update will not help struggling customers when the next round of mid-contract rises apply. If inflation continues at its current rate, customers could be looking at eye-watering bill increases of up to 15% in spring 2023, in addition to the tough hikes we have already seen come into force this year.”

-ENDS-

Notes

1. Uswitch research: https://www.uswitch.com/media-centre/2022/01/inflation-frustration-mid-contract-price-rises/