MSE News: Phone firm hiking prices? You'll soon be able to dump it, penalty-free

Vodafone are increasing their standard call prices from 1 Dec:

http://www.vodafone.co.uk/campaigns/price-changes/pricing-changes-21/index.htm?cid=rdr-13144-02

Im desperately trying to get rid of them as their data and voice reception is rubbish whereever I go.

Any pointers on what arguments I should use?

This was largely down to a successful campaign by Which (the Consumers' Association). It is a welcome victory for common sense.

Even better, I would like to see 30-day SIM-only contracts become the norm across the industry; there is no need for these long contracts if we do away with combined selling of phones and service contracts. I would like to see unbundling of the goods and the service to promote competition and transparency.

Subsidising handsets through inflated monthly service charges:

• Encourages consumers to acquire handsets they cannot truly afford through an unhealthy "buy now pay later" consumer debt culture with a disguised loan from the mobile network.
• Distorts competition by disguising the true price of the handset and of the service, as opposed to a SIM-free handset and SIM-only service.
• Encourages wasteful acquisition of new handsets because consumers mistakenly believe they are receiving the handset for free or for very little.
• Necessitates long contract durations in order to spread the cost of the handset, which inhibits competition by preventing consumers from switching networks.
• Causes consumers to continue paying the inflated monthly charge even after they have paid off the loan/subsidy of the handset, unless they remember to take action at the end of the minimum contract period.

Subsidised handsets are usually SIM-locked which:

• Inhibits competition as it makes it more difficult to switch networks.
• Prevents consumers from using local SIM cards abroad, allowing UK networks to impose unreasonably high roaming charges by excluding foreign competition.

For these reasons, Ofcom should encourage unsubsidised SIM-free handsets and competitive SIM-only contracts to become the norm, as is common in many other countries. At the very least, networks should be forced to unbundle the monthly handset subsidy repayment and the monthly charge for service (like O2 have started doing), itemising the two separately with independent contract durations and even a clearly quoted APR for the disguised loan. The monthly handset loan/subsidy repayment should not be allowed to continue after the cost of the handset has been paid off.

so its only for new customers?

robbies_gal wrote: »

so its only for new customers?

It was the same story with the Consumer Rights (Payment Surcharges) Regulations 2012. The mobile networks can continue to apply non-direct-debit surcharges to contracts started before 6th April 2013. It's hard to apply legislation or rules retrospectively.

boatman wrote: »

So the companies will take this as a green light to hike existing contracts to the extreme in the next few weeks, great!

Not quite - if they push it too far, the existing clauses can kick in.