Phone companies are making a mockery of Ofcom rules banning mid-contract price hikes: HELEN KIRRANE

Around 15million O2 customers found out this week their bills would rise by £2.50 a month for airtime plans from 1 April 2026.

Cue the collective groan – yet another thing to stump up for. But the news was made even worse by the fact that this is 40 per cent more than the increase customers were expecting – of £1.80 a month.

It means that O2 customers will see their bills rise by £30 a year, up 40 per cent from the £21.60 annual increase previously written into their contracts.

Phone, broadband and TV companies have historically hiked prices in the middle of contracts in line with inflation, often with 3.9 per cent added on top.

But new rules introduced by the communications regulator Ofcom in January this year banned the practice in an attempt to protect consumers from surprise price hikes in the middle of their contract.

Under the new rules, telecoms firms can still increase prices, but any hikes must be set out at the point a deal is taken out, in pounds and pence – rather than in percentage terms.

New rules introduced in January by telecommunications regulator Ofcom were supposed to stop companies ripping off customers with inflation-linked mid-contract price hikes

Why, then, was O2 allowed to hike bills for more than 15million customers by more than the £1.80 a month increase they agreed to at the start of their contract?

The answer lies in a get-out clause for telecoms companies in the regulation, which means O2 has not broken any rules in slapping customers with an unexpected bill increase.

Ofcom says providers are allowed to change the terms of a contract, which can include a price rise, but they must give customers at least one month’s notice and a right to exit the contract penalty-free if the change does not benefit the customer.

As long as operators abide by these terms, they are free to hike bills as ever they did before – only this time with the rises laid out in pounds and pence.

Ofcom said it was ‘disappointed by O2’s decision’ which ‘goes against the spirit’ of its rules which were designed to ensure certainty and transparency for customers signing up for a deal.

But O2 is not alone in doing this. In July, BT, EE and Plusnet announced customers’ bills would be rising by £4 a month instead of £3 a month for broadband and £2.50 a month instead of £1.50 a month for sim-only deals.

While just a few weeks ago, Virgin Media decided to increase its fixed mid-contract price rise from £3.50 to £4 per month for new and re-contracting broadband customers.

The fact that firms can still do this makes a mockery of the very regulation put in place to protect consumers from unjustified price increases.

What is the point of forcing telecoms firms to be more transparent if they are given a green light to circumnavigate rules and continue practicing their rip-off tactics?

It’s also no good saying customers can get out of their contract penalty free if they don’t agree with the new price.

Mobile and broadband providers, along with other firms like utility companies and insurance providers, bank on you not leaving, whether because you forget, can’t be bothered or simply decide you don’t want the hassle and so swallow the price rise.

Not to mention how fiendishly difficult it can be to cancel a contract. Two years ago, when I tried to cancel my broadband contract with Sky, I called, emailed and spoke with a chatbot countless times to cancel but they would not process the cancellation and kept sending bills.

My emails went unanswered and calls to agents would disconnect mid-call or I was told there was ‘an issue’ with their system that meant they couldn’t cancel the contact over the phone and to try again tomorrow.

If you are one of the those caught in the trap of a surprise bill hike from your phone or broadband provider, my advice is to run now while you can.

Until the regulator goes further with an outright ban on mid-contract price hikes of this kind, there’s nothing to say your next provider won’t do the same. 

But they must allow you to leave without having to buy your way out of a 12-or 24-month contract.

Mobile providers such as Smarty, Lebara, and Voxi don’t raise prices mid-contract according to comparison website Uswitch.

So run a comparison to find a well-priced deal with good coverage in your area and vote with your feet by getting out if your deal has been unscrupulously hiked by more than you signed up for to.

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