New Ofcom regulation on pricing takes effect

Just over a week ago, the UK telecoms regulator Ofcom changed the regulation around fixed contracts with telcos to protect consumers from price changes being applied after a contract is signed.

Many customers have complained that the contract they believed was for a fixed amount has increased without explanation. Over 1,000 customers approached Ofcom with a formal complaint about the practice.

Of course, there are two sides to the story. The telcos argue that if their own costs are driven up then they need to be able to pass this on to the customer. The confusion is that customers expect a contract with a set price to remain the same for the lifetime of the contract.

The new regulations should be a good solution for both parties. Telcos will be allowed to increase the ongoing price of a contract if they need to, but they must send a written notification to the customer informing them of the intention to change price.

The customer then has a period of 30 days during which they can choose to leave the telco without any switching fee.

This new regulation gives the companies the ability to change price without upsetting their customers and it allows customers the freedom to switch to a new provider if they don’t want to pay the new price.

Every telco in the UK has agreed to the new regulation – this is a good example of the regulator taking an issue and developing a pragmatic solution that works for all parties.

At Ofcom

 

Photo by Steve Bowbrick licensed under Creative Commons

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