CPI not applied to discount

mda99das

I got my Vodafone bill and as expected it's gone up with CPI but then I remembered I get a discount applied. Why has that not gone up with CPI? Having their cake and eating it comes to mind.

PHK

I’m not with you, why would a discount increase?

Suppose you have a money off coupon for a shop to get 50p off something that costs £2. If the item went up to £2.25 you wouldn’t expect the coupon to increase by the same proportion. 

EssexExile

What's the bill? What's the discount? Is the discount an amount or a percentage?

molerat

Orange used to do the same.  We had a £15 plan with a £10 discount so £5 per month.  The increase was applied to the £15 so at 5% it went to £15.75 - £10 = £5.75, a 15% increase.  Likely a complaint would get it reduced.

mda99das

The discount is a set amount and not a percentage.

simax

My £21 Voda sim only plan is discounted to £15 and has just increased to £17.16 - which is CPI+3.9%… that’s 14.4%… so not sure what’s happened with yours but mines ok?!

molerat

mda99das said:

The discount is a set amount and not a percentage.

But that is not how they sell it to you.  Generally it is sold, for example, as a £10 plan, not a £20 plan with a £10 discount. Other providers seem to manage it OK.

airmenraid

FWIW, when I tried to renew my home broadband contract with Vodafone, they tried to offer me one of these discounted contracts where the annual price increase is applied to the pre-discounted price. I thought it was really unclear and misleading (especially as the adviser on the phone seemed confused as well) so I sent them the following complaint:

Dear Vodafone,

Today, I called up your customer service team in order to renew my broadband contract.

For context, I am currently on a Vodafone Full Fibre 100 plan which is coming to an end in the middle of August 2023. When I started on this plan in August 2021, the monthly cost was £26.00. Like many providers, you increase prices annually by CPI+3.9% so after the first increase, my monthly cost was £28.42 and after the second it is now £32.51. Although I disagree with the imposition of in-contract price increases when the price for new customers remains flat, I cannot deny that they are pointed out to me sufficiently clearly when signing up.

The agent on the phone was able to offer me a new contract on the same plan with a monthly cost of £27.00. He said that this was a £39.00 plan with a £12.00 discount. I was a immediately a little suspicious so asked if the CPI+3.9% increase would apply to the pre-discounted price of £39.00 or the effective £27.00 amount. He put me on hold and asked to clarify with his manager. When he came back, he assured me it would apply on the discounted price of £27.00 so I was happy to proceed. He then sent me the the contract summary information for my approval. Upon reading this document, I was horrified to see in the small print that the CPI+3.9% increase applied to the pre-discounted price of £39 and there would be no corresponding increase in the discount. This means that, in effect, the price increase next April would actually be (39/27)*(CPI+3.9%) = 1.44...*(CPI + 3.9%).

I think this kind of obfuscation of the actual annual price increase is extremely misleading to consumers and find it unacceptable, particularly when many less numerically literate customers may not fully realise the consequences.

It shall come as no surprise that I intend to take my business elsewhere. For your information, one of your competitors (Zen) offers the same speeds on the CityFibre network for only £28.00/month with NO in-contract price increases. This of course, works out as a much better deal over the full term of the contract.

For the sake of your other customers, I hope you decide to change these misleading business practices or are forced to by Ofcom.

Yours sincerely,
<name>

Someone from the directors' office called me back but they weren't able to offer anything other than 1 month free (for the agent on the phone getting confused). I told them that because of these practices, I will be taking my business elsewhere.

I also submitted a similar complaint to Ofcom. They replied saying they can't really look much into individual cases but noted my complaint and pointed out that they are currently reviewing in-contract price increases from communication providers.