Firms such as BT, Sky, Vodafone, EE, and Virgin Media are now bound by new Ofcom regulations that aim to make annual price hikes more transparent for consumers. Prior to today’s change, deciphering the usual spring cost increases posed a challenge for UK customers, with telecom companies having the leeway to obfuscate the precise amounts of the increments.
Often articulated in percentages, these rises could be buried within the small print of terms and conditions.
“In recent years, many phone, broadband and pay TV companies have included price rises in their contract terms that were linked to unknown future inflation rates,” detailed Telecoms watchdog Ofcom. “These terms made it complex and laborious for customers to estimate what they will pay under a new contract, and complicated the process of shopping around for a deal. We have now banned this practice.”
The landscape is set to shift from today, as all broadband and phone suppliers are required to adhere to Ofcom’s fresh guidelines. This means newly signed contracts must clearly state the exact rate increase in pounds and pence, allowing households to more accurately budget for anticipated expenses and avoid the jolt of unexpected price surges.
For illustration, under previous policies, providers could cryptically note – often in diminutive text – that monthly fees would climb each April by the Consumer Price Index rate plus 3.9%. This vague approach compelled customers to track down the fluctuating CPI rate, determine their ongoing charges, and then perform calculations to deduce their forthcoming payment obligations, reports the Express.
Going forward, when signing up for a deal, households will be presented with prominent text and actual figures, eliminating any ambiguity. This change aims to provide consumers with clear and concise information about the prices they will be charged, enabling them to select the most suitable deal for their requirements.
Natalie Black, Ofcom’s Group Director for Networks and Communications, stated: “More than ever, households want and need to plan their budgets. Our new rules mean there will be no nasty surprises, and customers will know how much they will be paying and when, through clear labelling.”