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Telecoms providers must set out upfront price rises that will apply to customer contracts to protect consumers from uncertain and volatile inflation.
From today, Ofcom will require any price rises linked to future inflation to be clearly written into a customer’s contract at the point of sale.
Many leading phone, TV and broadband firms already include terms on inflation-linked price rises, but the actual cost to consumers has remained obscure. Customers are left to estimate what they will have to pay in upcoming bills due to volatile inflation rates.
Indeed, the communications regulator found that 55 per cent of its 11 million broadband customers and 58 per cent of monthly mobile customers were unaware of how inflation rates altered their costs.
The research found that even when people did consider inflationary price rises, they didn’t understand them fully, making it difficult for them to estimate their payments.
From now on, however, providers will have to set out any future price rises in “pounds and pence”.
Ofcom’s group director for networks and communications, Natalie Black CBE, said: “More than ever, households want and need to plan their budgets.”
“Our new rules mean there will be no nasty surprises, and customers will know how much they will be paying and when, through clear labelling.”
When the policy was announced last July, Ofcom’s telecoms policy director Cristina Luna-Esteban said: “With household budgets squeezed, people need to have certainty about their monthly outgoings.”
“But that’s impossible if you’re tied into a contract where the price could change based on something as hard to predict as future inflation.”
Virgin Media and Vodafone have been approached for comment.
