Feature Article

January 23, 2014

Ofcom: UK Customers Can Leave Without Penalty if Carriers Increase Rates

Carriers love to use the threat of cancellation fees to keep customers chained to their contracts, but new regulations from Ofcom will help Brits leave their carriers, according to The Guardian.

Ofcom, the U.K. equivalent to the U.S. Federal Communications Commission, will require carriers to allow customers to leave if they raise their rates of a fixed plan midway through the contract without the carrier imposing a penalty fee.

Carriers will also have to give customers a month’s notice before raising their rates and communicate those changes clearly, giving them a chance to leave without penalty before the rate increases take effect. The rules apply to both mobile, landline and broadband contracts. EU law prevented Ofcom from banning these rate increases entirely.

Ofcom has also published a guide for consumers on how to choose a plan, including a checklist they should consult before signing a contract.

“We have reached an important milestone in our work to ensure consumers and small businesses have better protection against unexpected price increases,” Ofcom consumer director Claudio Pollack said. “Additionally, our new guide highlights important factors customers might want to consider before entering into a new contract to help them understand exactly what they are signing up to.”

Across the pond, cancellation fees are also becoming a hot topic. T-Mobile started a campaign where it will pay the cancellation fee of any customer looking to switch from another carrier.

"This is good news for mobile phone customers and the 60,000 people who supported our campaign against unfair price rises in fixed contracts,” Richard Lloyd, executve Director of Which?, a U.K. consumer review site, told The Guardian. “People can now be confident that the price really will be fixed when they sign a mobile contract, or they can walk away without a steep penalty if faced with a hike.”

The site hosted a campaign, “Fixed Means Fixed,” to encourage users to sign a petition asking carriers to do away with changes to their plans.

Edited by Cassandra Tucker

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