Ofcom ban inflation-linked price rises with effect from 17 January 2025.

Detail_Merchant

Ofcom: "Wherever telecoms or pay TV providers include price rises in their contracts, they must set these out clearly in pounds and pence, before a customer signs up."

https://www.ofcom.org.uk/phones-and-broadband/bills-and-charges/review-of-inflation-linked-telecoms-price-rises/

The new rules and guidance will apply to new contracts from 17 January 2025.

la531983

Well this wont benefit anyone, because all that will likely happen is the provider will state an amount in the contract that is likely going to be higher than the %age increase would have been.

zagfles

Great timing! Now that CPI has come down to 2%, they're going to ban contracts that say something like £30 increasing with CPI+3.9% every April, and instead will say something like £30 now and £33 from April.

So a 10% increase instead of a 6% increase. 

la531983

zagfles said:

Great timing! Now that CPI has come down to 2%, they're going to ban contracts that say something like £30 increasing with CPI+3.9% every April, and instead will say something like £30 now and £33 from April.

So a 10% increase instead of a 6% increase. 

Yup exactly, this wont benefit a single person.

Neil_Jones

la531983 said:

zagfles said:

Great timing! Now that CPI has come down to 2%, they're going to ban contracts that say something like £30 increasing with CPI+3.9% every April, and instead will say something like £30 now and £33 from April.

So a 10% increase instead of a 6% increase. 

Yup exactly, this wont benefit a single person.

The point of the consultation and the statement was that the rises that come each April will now be determined in advance, rather than being open-ended as it was before with a figure that nobody knew that wouldn't be determined until like months into the contract. Now you can sign up for £25 now in the knowledge that it will go up by (for example) £3 a month from next April rather than having to remember to check the news to find a figure, add 3.9 to it, then add x + 3.9% to what your'e paying and then guess as as to what your new deal with be...

It was never about banning mid contract price rises.

Also looking at the statement the new rule only applies to new contracts from Jan 17 2025, so if you're already agreed to x+3.9% you're committed until you get a new deal.

la531983

Neil_Jones said:

la531983 said:

zagfles said:

Great timing! Now that CPI has come down to 2%, they're going to ban contracts that say something like £30 increasing with CPI+3.9% every April, and instead will say something like £30 now and £33 from April.

So a 10% increase instead of a 6% increase. 

Yup exactly, this wont benefit a single person.

The point of the consultation and the statement was that the rises that come each April will now be determined in advance, rather than being open-ended as it was before with a figure that nobody knew that wouldn't be determined until like months into the contract. Now you can sign up for £25 now in the knowledge that it will go up by (for example) £3 a month from next April rather than having to remember to check the news to find a figure, add 3.9 to it, then add x + 3.9% to what your'e paying and then guess as as to what your new deal with be...

It was never about banning mid contract price rises.

Point being in your example, it goes up to £28, rather than the £26 and pennies it likely would be going up to had they kept it the same.

Ergo, benefits nobody but the companies, who will now just over estimate what inflation will be rather than under estimate.

steven141

They should just ban mid contract price rises anyway and just make it something like £30 for your contract instead of £45 (example), then once your contract ends you either move to a new contract if you request it or you move to the standard rolling price (in my example £45). This is what happens now anyway but people would be free to leave after the contract and wouldn’t worry about price rises for the duration of the contract. 

Marksfish

So with BT and EE, also now Plusnet, you are guaranteed a 8- 10% minimum increase annually instead of maybe (in an ideal world) 2% + CPI.

bristolleedsfan

Marksfish said:

So with BT and EE, also now Plusnet, you are guaranteed a 8- 10% minimum increase annually instead of maybe (in an ideal world) 2% + CPI.

Signed up on or after 10 April 2024,  price will increase every April, £1.50/month for mobile, £2/month for TV and £3/month for broadband.

Someone paying £26 per month faces 11.5% per month increase for Broadband.

Money_Grabber13579

They should have gone the whole way and banned mid contract increases entirely. If the suppliers didn’t like that, they would just offer shorter contracts instead. The regulator is supposed to be protecting customers but as many have said, this approach only benefits the companies.

[Deleted User]

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