Are you aware of your broadband contract clauses and how they could affect you?
We all know that we should read the small print before signing on the dotted line – But how many of us actually do so? Especially when it comes to contracts from broadband and phone providers.
Perhaps with the current cost of living crisis, more people are being careful about what they are signing up for, and whether they should expect mid-contract increases in fees and exit costs. But what if you signed up before all the other household bills started to rise?
With households all over the country feeling the pinch, especially at this time of year, a mid-contract price increase is the last thing people need. But are broadband providers actually allowed to do this?
Ofcom, the UK regulator of telecoms, has recently launched a programme in which they will monitor and examine whether any in-contract price rises from ISP and phone providers were laid out clearly enough in customer contracts – Before they signed up.
Shouldn’t broadband packages stay the same throughout your contract?
Wouldn’t it be lovely if the price you signed up for remained the same throughout your broadband contract?
We don’t think that’s too much to ask, but unfortunately there are many broadband, phone and mobile providers that will hike up the price of broadband part way through your contract.
The rules laid out by Ofcom to try and combat this problem state that any potential for price increases must be set out in a prominent, clear and transparent way before a customer signs up.
If an ISP fails to do this, then the customer stands a chance at exiting their contract without having to pay an additional fee.
How could my ISP increase the price of my broadband?
The less dramatic price increases tend to come from providers like Sky Broadband and Virgin who implement standard price increases year on year. It’s pretty much expected by customers, despite consumers not knowing exactly what the new price will be.
This kind of price increase also usually allows the customer to leave without having to pay a penalty fee.
Other ISP’s like BT, EE and TalkTalk include a policy within their contract which enables them to increase their prices mid-contract in line with inflation and / or the Consumer Price Index (CPI). This could see an increase of 3-4%. Whilst this in itself can be quite transparent, the details are more often than not hidden amongst the small print that goes unread. On top of that, not all consumers have an in-depth understanding of inflation.
Unfortunately, this means that when the inevitable price hike appears, customers are unable to exit their contract part way through without having to pay a penalty fee.
Ofcom Investigates Broadband Price Hikes
Due to the number of complaints made between the 1st March 2021 and the 16th June 2022, Ofcom decided to investigate the apparent lack of transparency when it comes to in-contract price rises.
MIllions of people are currently facing increases in their household bills. Now more than ever, it’s vital that ISP’s and telecoms companies make sure they are being very clear with their customers about pricing and exactly what they are signing up for.
It’s the duty of these companies to lay out clearly and upfront any potential price increases within a customer’s contract.
Due to the number of complaints regarding this matter, Ofcom began investigating whether this was happening, and if anything more needs to be done to make potential price rises more transparent to customers.
Any providers found to not be following the rules regarding pricing transparency will be investigated individually.
Good News About Mid-Contract Broadband Price Increases
Investigations of this nature do of course take time, however you’ll be pleased to know that CAP and BCAP (Committees of Advertising Practice – sister organisation to the Advertising Standards Authority) are developing new guidance in regards to mid-contract price increases.
Their guidelines will include the potential for mid-contract price hikes to be more prominent within ads from broadband companies, mobile operators. By making it clear at this stage, there is less chance of consumers being misled.
Since the 17th June 2022, there have been strengthened rules for telecoms companies that enforce clear and simple information for consumers in regards to in-contract price rises – Before the customer signs on the dotted line.
In the current climate, it is absolutely imperative that customers know exactly what they are paying for their broadband, and how long they will be paying it.
