UK regulator Ofcom said that it would ban mobile phone carriers and broadband providers from linking prices to high inflation figures in the middle of a customer’s contract.
New rules from the watchdog, confirmed on Friday, will force companies to be upfront by telling their customer in pounds and pence about any price rises included in their contract.
Many major phone, broadband and pay TV companies now link their price rises to future inflation rates. That ‘unfairly’ puts the burden of shouldering inflation costs onto customers, Ofcom said.
It said that people ‘cannot predict’ inflation and ‘do not understand (it) well.’
‘We have decided to ban this practice,’ the regulator said.
From January next year therefore any price rise in a contract will need to be laid out in pounds and pence.
It is confirmation of rules that the regulator said that it was looking at in December last year.
Ofcom telecoms policy director Cristina Luna-Esteban said: ‘With household budgets squeezed, people need to have certainty about their monthly outgoings.
‘But that’s impossible if you’re tied into a contract where the price could change based on something as hard to predict as future inflation.
‘We’re stepping in on behalf of phone, broadband and pay TV customers to stamp out this practice, so people can be certain of the price they will pay, compare deals more easily and take advantage of the competitive market we have in the UK.’
By August Graham
Press Association: Finance
source: PA
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