EE faces Ofcom investigation into transparency of customer contracts

‘Some providers offer deals that include a price rise linked to inflation that takes effect during the contract’

MOBILE operator EE is being investigated by Ofcom after failing to make its contract terms and conditions clear to its customers.

The regulator stepped in after being told that the Bt-owned mobile network was failing to comply with new rules introduced in June.

Customers must be given a one-page summary of the details in a mobile contract before they sign up, according to Ofcom’s rules. “This will mean that people will be provided with a straightforward example of any price rises, which will help them make a fully informed choice about the deal that works best for them,” said Cristina Luna-esteban, Ofcom’s director of telecoms consumer protection, when the rules were first published in June. The summary must include details of the price, the length of the contract, the speeds users can expect and must also highlight any terms and conditions that kick in if a customer ends the contract early.

“Some providers offer deals that include a price rise linked to inflation that takes effect during the contract,” added Ofcom at the time. The inflation measure used – CPI or RPI – must be spelled out in the plain language summary. CPI, the Consumer Prices Index, was at 9.9pc in August, according to the latest official data. Office for National Statistics figures show that the older Retail Price Index measure of inflation is currently at 15pc, having almost doubled since April.

The telecoms watchdog began enforcing the new contract summary rules after concerns surfaced that customers were being presented with pages of dense legal information that few were paying attention to, sources said. Ofcom said it will gather more information about EE’S alleged failure to comply. The investigation is expected to take several months. An EE spokesman said: “We want our customers to be fully informed and we make sales information upfront, clear and transparent.

“We are fully engaged with Ofcom during the course of this investigation.”

Earlier this year EE owner BT said it would hit households with an aboveinflation increase in broadband bills with chief executive Philip Jansen hinting at price hikes of 13pc, adding £53 to the average bill.

Sources said an Ofcom review into telecoms industry billing practices was to be stepped up as a result.

Earlier this year EE was found to have overcharged customers by thousands of pounds after a billing system error, with one consumer hit with a bill for £25,000. The company apologised and told customers the charges were issued in error. In June the mobile operator hiked its prices by 9.3pc following inflation increases, despite Ofcom publicly calling on telecoms companies to limit price rises amid national concerns over the cost of living.