MSE News: O2 to hike its prices by 2.7% - can you leave your contract penalty-free?

ChilliP2012

TBH 4G is very poor in my area despite full coverage. I get faster speeds on HDSPA with 3 than I do with O2's 4G.

rmas21920

Earthworm wrote: »

I think this is the wrong way to view it... Especially if you wish to fight the rise. Personally if I wanted to fight this, which I don't as I am not on O2, I would go down the route of fighting the term allowing O2 to raise their prices in line with inflation in the first place (contracts taken 23/01/14). I would argue this term goes against Ofcom rulings on increases and although their terms specifically allow it Ofcom rules specifically allow penalty free cancellation regardless of whether you are told about the increase or not.

This is not correct. Ofcom's guidance which can be found here http://stakeholders.ofcom.org.uk/binaries/consultations/gc9/statement/guidance.pdf

Has these examples of what is and is not considered grounds for fee free cancellation (When a contract has been taken on or after 23/01/2014:

A1.14 These examples of the application of this guidance are for illustrative purposes:

• Example 1: discretionary price increases
The subscriber agrees and enters into a 24-month contract for services on terms that the core subscription price will be £10 per month. The contract also contains a term to the effect that the CP may increase the agreed core subscription price by up to a certain amount, percentage or index-linked level (such as RPI) Ofcom is
likely to treat any exercise of the discretion to increase this agreed price during the fixed minimum term of the contract as a modification meeting GC9.6’s material detriment requirement.
Ofcom’s concern is with the application of price and price variation terms which give the CP discretion as to, for example, the possibility, amount and/or timing of a price increase. We are likely to take a similar approach to that above to the application of
contract terms that reserve such discretion and/or are to the same or similar effects as those in example 1.

• Example 2: agreed prices

The subscriber agrees and enters into a 24-month contract on terms that the core subscription price will be £X per month for the first 12-months (or some other period) and £X + £Y (or £X + Y%) for the second 12-months (or some other period). On the basis that the relevant price terms are sufficiently prominent and transparent
that the subscriber can properly be said to have agreed on an informed basis, at the point of sale, to the relevant tiered price(s), Ofcom would not regard the application of the agreed price in the second period as a modification of the contract capable of
meeting GC9.6's material detriment requirement.

• Example 3: agreed prices

The subscriber agrees and enters into a 24-month contract on terms that the agreed core subscription price will be £X per month for the first 12-months (or some other period) and £X + RPI for the second 12-months (or some other period). On the basis that the relevant price terms are sufficiently prominent and transparent
that the subscriber can properly be said to have agreed on an informed basis, at the point of sale, to the relevant tiered price(s), Ofcom would not regard the application of the agreed price in the second period as a modification of the contract capable of
meeting GC9.6's material detriment requirement.

A1.15 As set out above, the position in examples 2 and 3 depends on the relevant price terms being sufficiently prominent and transparent that the subscriber can properly be said to have agreed on an informed basis, at the point of sale, to the relevant
tiered price(s). Where that is so, the application of the agreed price(s) at the relevant time(s) would not be a modification of the amount he or she has agreed and is bound to pay. Most clearly, this proviso as to prominence and transparency could be met where CPs market offers, and enter into contract terms, in a way that
sets out with equal prominence that the contract price is £X in period 1 and £Y in period 2 (or some other periods).

Earthworm

Thank you for posting that I'd not actually seen it. The press at the time gave the impression Ofcom had stopped price increases when in-fact they hadn't.

After seeing that I don't actually see any issue with the RPI increases as it has been widely known for over a year that networks can and have done/do it.

NittyGritty

the chances of making a claim for RPI hike with CISAS and winning are very slim to nil,


the best chance people have of winning is the increase in calls and txts out of bundle hikes. if you choose to take it to CISAS, that would be the best reason to use

parrysite

NittyGritty wrote: »

the chances of making a claim for RPI hike with CISAS and winning are very slim to nil,


the best chance people have of winning is the increase in calls and txts out of bundle hikes. if you choose to take it to CISAS, that would be the best reason to use

The out of bundle hikes is the main problem for me, it will work out expensive for me as there are a few instances coming up where I will need to use a number of them. The principle of the 2.7% rise is annoying, too when I was sold it as a fixed price contract.

adelleda_

NittyGritty wrote: »

the chances of making a claim for RPI hike with CISAS and winning are very slim to nil,


the best chance people have of winning is the increase in calls and txts out of bundle hikes. if you choose to take it to CISAS, that would be the best reason to use

Thank you for bringing this to light for me! I signed up to an o2 24 month contract in November, and was pretty annoyed about the RPI price rise. An extra 59p each month for 24 months isn't the world, but it's enough to get your goat! However, after reading the information about not being able to do anything as it's within the 'RPI price rise' I didn't think there was any chance of getting out of my contract.

But hearing about the out of bundle hikes has given me hope. In addition to my usual tariff, I pay extra for multimedia messages, of which I send around 3-5 each month. The price of multimedia messages has risen by 5p which wasn't explained in the email I received last week from o2, yay!

So, for the next two years, I'd be paying an extra 59p a month for my contact (who's to say they aren't going to put it up next year...), as well as an extra 5p every time I send an MMS!

An email will be winging it's way to o2 shortly....

GolfBravo

NittyGritty wrote: »

the chances of making a claim for RPI hike with CISAS and winning are very slim to nil,


the best chance people have of winning is the increase in calls and txts out of bundle hikes. if you choose to take it to CISAS, that would be the best reason to use

Ofcom, 23 October 2013:

Consumers and small businesses should be allowed to exit their landline, broadband or mobile contract without penalty if their provider increases the cost of their monthly deal, Ofcom announced today.
Ofcom is today telling providers how to interpret and apply current telecoms sector rules in relation to price increases during fixed-term contracts. Ofcom is also confirming the cancellation rights it expects providers to give consumers following price increases.

This Guidance sets out that:
Ofcom is likely to regard any increase to the recurring monthly subscription charge in a fixed-term contract as ‘materially detrimental’ to consumers;
providers should therefore give consumers at least 30 days’ notice of any such price rise and allow them to exit their contract without penalty; and
any changes to contract terms, pricing or otherwise, must be communicated clearly and transparently to consumers.

Ofcom’s decision in detail
All communications providers must follow a set of Ofcom rules called ‘General Conditions’. General Condition 9.6 requires that communications providers give consumers at least one month’s notice of any changes to a contract that are likely to be of ‘material detriment’ and allow them to exit that contract without penalty.
Consumers have faced being treated inconsistently, with some allowed to leave their contract without penalty following price increases, while others were not.
The Guidance addresses this uncertainty and seeks to put consumers in a fairer position. It also reflects European rules and acknowledges the significance of core subscription prices and price rises to telecoms consumers.
It makes clear that Ofcom is likely to consider any increase to the monthly subscription charge to be materially detrimental to a consumer. For such price increases, the Guidance states that a consumer’s right to exit their contract without penalty should be automatically triggered.

- Under General Condition 9.6, communications providers are required to give customers a minimum of one month’s notice of any change to their contractual terms that is likely to be of ‘material detriment’ and customers must be able to withdraw from their contract penalty-free following such notice.
- Limited exceptions include passing on increases in VAT and any other taxation charge or regulatory levy, imposed by changes in mandatory provisions laid down by Government or regulatory authorities, payment of which is compulsory.
- The Guidance will apply to any increases to the recurring subscription charge. The recurring subscription charge usually applies monthly. Ofcom regards this as the recurring charge that the customer is contractually obliged to pay for a core package of price inclusive services (such as number of call minutes to certain numbers, text messages and data allowances for mobile customers) for a pre-determined period of time (of no more than two years for consumers).
- Many of the rules that apply to the telecoms sector are derived from the common regulatory framework set out in European Directives. Those relating to changes to contract terms are in Article 20 of the Universal Services Directive 2002/22/EC.
- Although the Guidance Ofcom is issuing today does not apply to non-subscription prices, any increases to these prices will still remain subject to Ofcom’s General Conditions (including General Condition 9.6) and the relevant consumer legislation. Ofcom will monitor complaints about any increases to non-subscription charges and may review its position if new evidence of consumer harm comes to light.

(The Universal Services Directive (Article 20, Chapter 4) covers your price changes and the right to cancel without penalty.)

******************************

I sent my non-acceptance of the price increase email to O2 last Wednesday. If no reply by Thursday my next step is the Telecommunications Ombudsman (it will cost O2 over £300).
:beer:

Their complaint procedure is very simple (just make sure you complain to O2 1st).

This website allows you to complain online.

Their online survey:
Is the company that you want to complain about in our list of participating companies? YES
Have you told the company that you have a complaint which needs to be resolved? YES
Has your complaint been ongoing for more than 8 weeks? NO
Has the company said it can do no more to help? YES, in their chat they told me to get stuffed (chat transcripts emailed to me).

Thank you
From what you've told us so far, it appears that we may be able to consider your complaint.

What happens next?
You can tell us all about your complaint now; we have an easy to fill in web form. It will take around 10 minutes to complete. You must have a valid email address to use this method. We will need to know:
some details about you
the date that you first complained
what you and the firm have done about the problem, and
what you want as a resolution to the problem. If you are asking for an amount of money we need to know how you have arrived at the amount being requested.

Putting things right
When we have all the information about your complaint, we will decide how best to handle it. If we propose a remedy that you're happy with, the company will be required to put this in place and we will make sure that this happens.

redux

I'm just amused at the choice of words in the replies by O2 that people are getting so far.

The price of everything is going up, they say.

The price of mobile telephony was falling for a long time, so they had about 20 or 25 years of never relying on this precedent before.

They mention some other benefits of being with O2, such as Priority Moments or O2 WiFi.

Surely this is more likely to risk aggravating people who do not use these services, who might view them as added cost to the operation rather than added value?

O2 WiFi is a strange thing to mention in there, as this is free to use for even non O2 customers.

Oddly they haven't mentioned what is potentially my favourite O2 service, TU Go. This application allows use of one's O2 number without O2 coverage. I've scarcely used it yet, but it will mean for instance that when abroad using either wifi or a data SIM from a local network, calls can be received and made with no roaming cost. Personally I think other things would have to be bad to contemplate losing this facility.

digp

I can't see tu go lasting long, another scheme by o2 which is daft.

Certainly not a reason to stay with o2! give how expensive o2 have become, as have a lot of the other networks.

my advice to people is to switch switch switch.

if o2 has good coverage for you and you don't need bells and whistles then go to Tesco Mobile.

Guys_Dad

It is not a fixed price contract if the network tells you prominently that there will be an annual increase each March. The question is, was the particular point made prominently?

The other th ING is that if you are signed up to a particular tariff, and that tariff had a name, then if that named tariff for new customers us advertised at £22 per month then that is the price of that tariff, is it not? And if it is, then that is the price for all on that tariff, just like gas tariffs.

One could then argue that just get a use O2 have said in advance that your tariff will go up in March, if it is advertised at the original rate for new customers in April, then O2 may have decided to leave the tariff as it was.