Ofcom mulling new opt-out policy to combat telecoms price hikes

Ofcom has begun a consultation process to investigate the issue of price hikes in the telecoms industry, a practice critics say is harming consumers and has resulted in a rash of complaints.

The deliberations could ultimately result in the amendment of Ofcom's general conditions to allow people to opt-out of their fixed-term price plans without penalty, if a provider increases the tariff mid-contract.

The consultation is set to be concluded by 14 March, 2013, with the regulatory body publishing its final decision in June.

The proposed modifications will affect fixed contracts for landline, broadband and mobile services. Further protective measures are also being discussed, which include improving carrier transparency in regards to the potential of price increases, as well as the instatement of an active ‘opt-in’ process to ensure consumer consent in the instance of a rising tariff.

The possibility of a complete ban on all price rises was brought up, but has since been dropped by Ofcom on the grounds that such a measure may be in violation of current European business laws.

The proposals were derived from a prior Ofcom review of consumer complaints, which examined 1,644 objections made during the period September 2011 to May 2012.

“Many consumers have complained to us that they are not made aware of the potential for price rises in what they believe to be fixed contracts,” explained Ofcom’s consumer group director, Claudio Pollack.

“Ofcom is consulting on rules that we propose would give consumers a fair deal in relation to mid-contract price rises," he added.

The announcement comes after O2 raised the price of its monthly mobile plans by 3.2 per cent, making it the final UK carrier to hike its prices ahead of the arrival of 2013.