Mobile companies ‘hiding inflation-busting price rises’

MOBILE phone and broadband providers are accused of hiding inflation-busting price increases in customers’ contracts as consumers brace for a double-digit rise in their bills next year.

Ofcom, the telecoms regulator, is investigating whether companies are “up front” with customers about the fact bills can rise mid-contract. Many broadband and mobile phone contracts include a clause that states a customers’ contract will rise with inflation, plus a further set percentage, every year, even in the middle of a two-year deal.

BT contracts rise every year by the rate of inflation in the Consumer Price Index, plus 3.9pc. These terms have left consumers facing hikes of 14pc next year. The Bank of England estimates inflation at around 10pc in January, which with the additional fee means inflation-beating price rises in April.

The regulator said its investigation would be “industry-wide” and did not specify which contracts or operators had caused concern. Ofcom said that following “consumer complaints we are concerned that some price variation terms in consumer contracts entered into between 1 March 2021 and 16 June 2022 may not have been sufficiently prominent and transparent”.

The Telegraph revealed in July that Ofcom was considering an investigation into the small print of contracts. Lindsey Fussell, Ofcom’s networks director, said: “As millions of people are having to deal with rising household bills, it is more important than ever that telecoms companies don’t shirk their responsibilities and keep customers fully informed about what they are signing up to.

“It’s vital that people are told clearly up front about any future price rises they will face while they are in contract, and we’re investigating to check whether this happened in practice.”

Ofcom said a third of UK households, around 9m people, are having trouble paying for their phone, broadband and streaming bills as costs rise across the economy.

BT said its price increases were “clear and predictable, taking place in April each year” and the company was “committed to customers receiving clear communication well in advance reminding them of any change”.