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Ofcom to investigate price rises on 'fixed' mobile phone contracts

Mobile phone companies could be banned from raising customers' bills mid-contract, the telecoms regulator Ofcom (opens in new tab) announced today.

Ofcom said it would investigate how to protect people on fix mobile contracts from unexpected price hikes.

The news comes just days after mobile network Vodafone (opens in new tab) announced that it would begin increasing line rental charges on its fixed contracts by £1.55 a month in November. Orange (opens in new tab), T-Mobile (opens in new tab) and Three (opens in new tab) will also impose similar increases.

Many fixed-term deals have small print allowing firms to put up their prices, with at least 30 days' notice.

The regulator said that it had received a surge of complaints with regards to these kinds of increases. Between September 2011 and May 2012, Ofcom had received 1,644 complaints from aggrieved customers of several mobile companies.

A spokesperson for the regulator said it would be looking at whether price variation clauses were appropriate at all.

(opens in new tab)"Consumers are saying they are not aware the clauses are there at all. And we are looking at the information given at the point of sale," she explained.

She went on to say that fixed contracts without hidden clauses should also apply to broadband and landline services.

"Some consumers felt that communications providers should not be able to impose price increases during the life of a contract, and, if they do, the consumer should be able to exit the contract without penalty," explained Ofcom.

Consumer group Which? (opens in new tab) welcomed the regulator's announcement, saying that fixed contracts should mean just that.

"We hope that Ofcom will now act swiftly to ensure that the mobile phone companies are made to drop hidden clauses in their contracts that allow them to hit consumers with millions of pounds worth of unexpected price increases," said the group's executive director Richard Lloyd.