'Unfair' tariff tweaks yield networks £90m
Fixed-price contracts need fixing, says Which?
Mobile networks unfairly make up to £90m a year thanks to contract Ts&Cs which allow them to raise the price of fixed-rate tariffs, consumer reviews site Which? has claimed.
We've highlighted this kind of behaviour before, most notably when Orange customers faced a 4.34 per cent monthly price rise last November, bit Which? says Three, T-Mobile and Vodafone are all guilty of it too and has now filed a formal complaint with telecoms watchdog Ofcom.
Which? research suggests that 70 per cent of people on phone contracts are unaware that network providers can increase the price during the term. The organisation has been contacted by more than 1700 people who claim to have been affected by these 'hidden' price hikes.
If the price could rise over the period of a contract, operators must be clear about the fact in their advertising and allow people to switch providers without penalty, Which? said.
Source: Borosjuli on Flickr
Three this week upped the cost of mobile and broadband contracts set up before 8 March 2012 by 3.6 per cent. In May, when it announced the increase, the operator pointed to contract terms and conditions which allow it to raise prices in line with inflation.
"This means that you won't be able to leave your contract early as a result of this change," it said.
Ofcom says it has investigated the issue since January and will examine the information Which? has provided. ®
Customers have no recourse
After Three told me they were increasing their prices, I studied the terms and conditions which don't seem to actually allow them to vary the terms without me having the right to withdraw from the contract, however their customer services teams are adamant that section 4.1 provides them this right.
I have been through the full complaints process with Three to no avail, I've contacted OfCom who won't get involved with me because they consider it a 'commercial matter', rather than a basic contract dispute. Ombudsman Services Communications won't get involved for the same reason. Which basically leaves me having to go through the small claims court which I'm quite happy to do because I can't stand companies hiding behind their terms and conditions knowing the customer has little or no way of properly challenging them, and you can be sure that if WE were potentially breaching the T&Cs they'd be enforcing them zealously.
So I'm having a chat with a solicitor today to see about the small claims process. I'm going to do it just out of principle, even if it does end up costing me.
Re: Putting the CON back into CONtract
"people have signed up to a contract which has in its terms the ability for the phone company to increase prices in line with inflation... Perhaps they should have taken more care when they signed up in the first place."
Maybe they should, but most people do not read the full T&Cs when signing up to these. I know "I didn't read it" is no excuse, but this is how it is.
Also, when a customer is tied in to a contract for a long time (e.g. 2 years), the fact that the price can be increased during this term without the option to cancel is unfair (IMHO). A fixed term contract should not allow mid-term price changes, as most people would have the expectation that the prices involved form part of the contract. Any terms which alter a contract from what would reasonably be expected should be made clear to the customer, not burried in the T&Cs.
Putting the CON back into CONtract
What sort of contract is it where one party can change the terms at will and the other has to suck it up ?