Ofcom slams O2 over unexpected mobile phone contract price rise

The UK’s media regulator has criticised O2 for elevating its costs by greater than it promised prospects after they took out their telephone contracts.Ofcom mentioned it was “disenchanted” with the agency, and mentioned it was going in opposition to “the spirit of our guidelines” round being clear to prospects about value rises.In January, new guidelines had been introduced in to cease telephone and broadband corporations elevating costs in the midst of a contract with out warning.O2 mentioned it has not gone in opposition to the regulation and that Ofcom’s guidelines “don’t forestall corporations from rising annual value modifications – for instance, to put money into enhancing networks”.The corporate mentioned it spends £700m a 12 months on enhancing infrastructure and prospects can depart their contracts with out a penalty.However shopper knowledgeable Martin Lewis mentioned he was “up in arms” over the transfer, which was “making a mockery of Ofcom”. He mentioned on The Martin Lewis Podcast he believed this may result in different corporations following go well with.”O2 prospects’ costs are going up – however possible it means the door is open for all of us to now see costs by greater than we had been informed after we signed up,” he mentioned.O2 informed its prospects they’d 30 days to depart their contracts with none termination fees – although if their plan included a handset, they’d nonetheless must pay that off in full.However Mr Lewis mentioned older and susceptible prospects have a tendency to not swap and should miss the 30-day window, as the worth rises don’t are available in till April 2026.On Wednesday, O2 emailed its prospects to say it might be rising the worth of their contracts by £2.50 a month from April.It had beforehand marketed that month-to-month costs would solely go up by £1.80.”As we speak, we have written to the main cellular corporations reminding them of their obligations to deal with prospects pretty,” Ofcom mentioned.”We encourage any buyer who needs to keep away from these value rises to train their proper to exit with out penalty and signal as much as a brand new deal.”Ofcom’s guidelines had been introduced in to guard shoppers and cease sudden value rises occurring in the midst of a contract.They said corporations needed to inform prospects how a lot their invoice would rise by “in kilos and pence” earlier than they signed up.On the time, Ofcom’s director for networks and communication, Natalie Black CBE, mentioned: “Our new guidelines imply there shall be no nasty surprises, and prospects will understand how a lot they are going to be paying and when, by means of clear labelling.”However the guidelines solely banned value hikes linked to inflation.O2’s value improve is a flat price reasonably than a proportion of the month-to-month invoice.Telecoms analyst Paolo Pescatore of PP Foresight mentioned “O2 is pushing the boundaries” of the regulation.”That is extraordinarily unlucky, provided that the cellular operator must be centered on retaining prospects in a cut-throat market,” he’d informed BBC Information.In the meantime Tom MacInnes, director of coverage at Residents Recommendation, mentioned it confirmed Ofcom’s actions “have not gone far sufficient”.”The regulator must get up and make these important markets work for everybody,” he mentioned.”Ofcom wants to return to the drafting board and produce ahead plans to stamp out mid-contract value rises as soon as and for all.”Mr Lewis additionally mentioned he had written a letter about this addressed to the chancellor, the know-how secretary and the top of Ofcom.BBC Information has contacted them for remark.Ofcom didn’t touch upon Mr Lewis’ letter.Ernest Doku, telecoms knowledgeable at Uswitch, mentioned whereas the regulator’s newest telecoms complaints figures had been “at among the lowest ranges ever”, service points had been nonetheless the primary driver of complaints about cellular and broadband suppliers.”Towards the backdrop of accelerating annual value rises, suppliers must recognise their accountability to ship corresponding enhancements in service and worth,” he mentioned. “For shoppers, this information is a well timed reminder to match offers frequently and swap if their supplier is not sufficiently assembly their wants.”