Starting January 17, mobile phone, pay TV, and broadband providers will be prohibited from implementing unexpected price hikes during the term of a contract. Under new regulations set by Ofcom, companies must disclose any potential mid-contract price increases clearly and in precise monetary terms at the point of sale.

This decision follows a surge in customer complaints about substantial, unforeseen price rises, particularly amidst rising living costs. Ofcom highlighted that many telecom companies had recently altered contract terms to permit price increases tied to inflation, in addition to a standard 3.9% annual rise. Such changes made it difficult for customers to plan their budgets effectively.

Cristina Luna-Esteban, Ofcom’s telecoms policy director, emphasized, “Consumers need certainty about their monthly expenses. It’s unfair to be locked into a contract with unpredictable costs linked to inflation. Our intervention aims to eliminate this practice, allowing people to know exactly what they will pay, easily compare deals, and benefit from the UK’s competitive market.”

This regulation, proposed in December and refined through a consultation process, is designed to enhance transparency and protect consumers.

Ofcom reported that by April, approximately 60% of broadband and mobile customers were on contracts that allowed price adjustments based on inflation. Many customers were unaware of how inflation rates would impact their payments, making it challenging to predict future costs. Despite this, some providers offered fixed-price options, benefiting from a competitive market.

Consumer advocates expressed cautious optimism about the new rules. Tom MacInnes from Citizens Advice criticized Ofcom for the delay in implementing these changes, noting that billions of pounds had been added to consumer bills while many were facing financial difficulties.

“While the move to ban inflation-linked increases is a step forward, it does not completely eliminate the possibility of price hikes mid-contract,” MacInnes said. “There is still potential for providers to include vague terms like ‘prices may vary’ in their contracts, which could leave consumers vulnerable to unpredictable costs. We believe that a fixed price should truly mean fixed.”