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My 17% mobile phone bill increase – is it legal? LBC's Daniel Barnett explains
24 February 2023, 16:25
I’ve had a text from O2 telling me my mobile phone bill is going up by 17% from next month – that’s 13.4% RPI plus 3.9%. Is that legal?
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General consumer law doesn't prevent companies from increasing prices during the contract period – as long as the right to do so is reasonably prominent in your mobile phone contract.
Most mobile phone companies say in their contracts that they can apply an annual increase of RPI plus a small percentage on top (it’s capped at 3.9% on top of inflation).
As long as this is drawn to your attention when you sign up (and I remember the man in the O2 shop expressly telling me that would happen, and thinking at the time ‘That’s me stuffed, then’), it’s completely legal.
We’re all being stung by the fact that inflation is so high; something many of us didn’t envisage a year ago.
Under Ofcom rules, phone companies must allow you to withdraw early from your contract without any penalty, and must tell you of this right, if they change the price in a way that is to your ‘material detriment’.
Its guidance specifically says that it is "likely to treat [a RPI or CPI based increase] to the core subscription price agreed at the point of sale as meeting this material detriment requirement and giving rise to the right of withdrawal".
However, if the phone company told you clearly about the price increase when you signed up (as O2 did with me), you’re unlikely to get any joy from Ofcom.
If your phone company didn’t tell you about it when you signed up, then it’s worth complaining to Ofcom after you’ve challenged it directly with your phone company – but don’t expect a speedy response.
Just a few days ago, Ofcom announced it was going to investigate mid-term price increases further – with a potential view to strengthening consumer protection in the next year or so.
That doesn’t help those who, like me, were clearly told about the annual price increase when signing up and went ahead anyway.
If you’re out of contract, of course, things are easier – you can just switch to a different provider. There are many websites, including www.uswitch.com, that help you do this.