Ofcom, the communications regulator in the UK, has come up with a new measure that is going to take effect on January 17, which will see mobile, pay TV, and broadband companies give clearer information up-front to customers on any possible price rises during the contract. The move aims to provide clear information in simple language so that customers can better budget their money and avoid being stung by price increases.

Have you ever been shocked by the unexpected price increase on your mobile or TV bill? You are not alone. Many have been caught with sudden hikes in monthly payments, thus struggling to keep up with their budgets. Good news is coming! From 17 January, companies offering mobile phones, pay TV and broadband can no longer surprise customers with price increases during their contract.

What’s the Change?

From 17 January, all new contracts have to spell out any potential price rises in simple terms that anyone can understand. Ofcom looks after telecom services in the UK. This new rule is to help you know exactly how much you will be paying every month without any surprises.

Why is this happening?

Many consumers have reacted angrily to steep and unexpected price hikes. When other costs of living are already so high, such sudden increases through the floor are difficult to absorb. Cristina Luna-Esteban of Ofcom commented, “People need to know how much they’re paying each month. You can’t budget properly if your bill might rise by unforeseen amounts because of inflation.”

How Did it Work Before?

Previously, many telecommunications companies’ contracts included a clause that would allow them to increase their prices based on inflation. This typically meant applying a standard increase of 3.9% on top. It meant that when you signed a contract, you wouldn’t really know exactly how much you would be paying in the long term.

The New Rule and the Impact

Under the new rule, all information will now be provided up front to customers. Experts say it will make deals easier to compare so that people can pick the best one for their needs. The idea is to create a fair market where customers can make informed choices without fearing hidden costs.

Mixed Reactions

While this new rule is definitely a step in the right direction, not everyone is taking it hook, line, and sinker. Tom MacInnes of Citizens Advice argued that this shift was slow. He said that as a result of this delay, people across the country ended up paying more than they actually should have. “We welcome the ban on inflation-linked hikes, but it’s not enough. Ofcom should have completely banned mid-contract price rises.”

However, some consumer groups still have a qualm that companies will find loopholes to increase their prices. They will add fine print in contracts that will allow price changes. That is why it is important that the customer reads and understands all parts of his contract before signing.

What Should You Do?

Looking for a new mobile, pay TV or broadband contract? Remember to ask about any possible price rises. Always read the fine print and make sure to understand all terms. If you’re not clear on anything, don’t feel afraid to ask.

The Bigger Picture

Ofcom says the new rule comes as part of a bigger attempt to make the telecoms market fairer and more transparent. It wants to see customers treated fairly, empowered with the right information to enable effective decisions. Some companies already have fixed-price deals in place; the new ruling will ensure that more companies are transparent over pricing with their customers.

In Brief

This ruling, prohibiting surprise mid-contract price hikes, is definitely one step in the right direction for consumers. It will help to open and balance out the market for you so that you can take better care of your budget. However, most importantly, it still requires vigilance and caution while entering new contracts. You will avoid surprises in your bills by knowing your contract terms inside and out and asking the right questions that will help you get the best deal for your needs.

These very simple steps help you be safe from any surprises and will definitely keep your pocket in check. Thus, remain informed, stay smart, and enjoy uninterrupted mobile, TV, and broadband services, steering clear of shocks from price hike announcements.