Consumers should be able to pull out of fixed-term phone...
Consumers should be able to pull out of fixed-term phone contracts if operators raise prices mid-stream, the U.K. Office of Communications said Thursday in a consultation document (http://xrl.us/bn82pp). The regulator has been mulling whether consumers need more protection from price…
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hikes for landline, broadband and mobile services, and has found problems with the current system, it said. Existing rules are intended to reflect the “clear and straightforward general principle” that prices agreed upon should generally be fixed (and variable, if at all, only in limited circumstances), and that if prices are raised, consumers should be able to avoid the higher fees, Ofcom said. But the rules aren’t working properly, it said. It reviewed more than 1,600 consumer complaints from September 2011 to May 2012 about changes to contract terms and conditions, finding that a quarter of those who complained said they weren’t made aware of the potential for price rises in what they believed to be fixed contracts. Another 16 percent griped specifically about the amount of price hikes and their adverse financial impact. This and other evidence suggested that existing rules don’t meet consumers’ legitimate expectations about contract rates, exposed them to unfair surprises, and didn’t give consumers the chance to end contracts without penalty. Ofcom considered four options: (1) Do nothing. (2) Make communications providers give customers more transparency of price variation terms. (3) Allow consumers to expressly opt into any variable price agreement. (4) Allow customers to withdraw from contracts without penalties when there are price increases for services applicable at the time the agreements are signed, including changes to the level of service provided. The first three alternatives wouldn’t resolve the problem, Ofcom said. Comments on its proposal are due March 14.