Probe launched into mid-contract rises

Telecoms watchdog Ofcom has launched a review into inflation-linked phone and broadband price rises that hit customers mid-contract.

It is concerned over the "degree of uncertainty" consumers face over future rises specified in "unclear and unpredictable" contracts.

The move follows consumer groups urging broadband firms to drop penalties for customers leaving mid-contract because of fears of impending "exorbitant" price rises or exit fees of more than £200.

Millions of broadband and mobile phone customers can expect to face monthly bill increase so fat least 14% from April because providers often link their annual price rises to January's retail price index and, which was 13.4%.

But Of co ms aid the unpredictability of inflation rates means it is difficult for consumers to know – months in advance – what price rises they will face when entering a contract.

General consumer law does not prevent companies from increasing their prices mid-contract, and many do.

Cristina Luna-Esteban, Ofcom's director of telecoms consumer protection, said: "Customers need certainty and clarity about what they will pay over the course of their contract, but inflation-linked price rises can be unclear and unpredictable.

"We're taking a thorough look at these types of contract terms, to understand fully the extent to which customers truly know what they're signing up to.”

Citizens Advice director of policy Matthew Up ton said: "What consumers really need is for Ofcom and the Government to ban mid-contract price rises."