Ofcom wants to launch an industry-wide enforcement programme into how broadband providers advertise price rises written into contracts.
It calls for more transparency on mid-contract price rises to make consumers aware that their bills could go up in the future.
It comes after Ofcom analysed complaints suggesting customers who entered contracts between March 2021 and 2022 were not provided with clear enough information on the potential for price hikes.
Ofcom states that if providers want to include future price rise clauses in a contract, the terms must be detailed prominently and transparently at the point of sale.
They also state that customers who were not clearly notified should have the option to exit the contract penalty-free
Ofcom is gathering more information from providers and may launch separate investigations into individual firms.
Customers are struggling with the cost of living right now. Inflation has reached its highest rate in 40 years, leading to costly price increases for broadband customers.
Ofcom’s latest survey found that nearly 10 million UK households are struggling to afford broadband bills, with some doubling in price since April 2021.
The same study shows that just under 1 in 5 households (17%) are cutting back on food and clothing to make sure they can afford their monthly internet tariff.
Research from consumer watchdog Which? paints a similar picture.
“Our research has found that some customers who signed up for a broadband contract in early 2022 could see prices soar by up to £113 in 2023 due to mid-contract price rises,” says Rocio Concha, Which? Director of Policy and Advocacy. “It’s extremely concerning that these mid-contract price rises may not have been properly advertised to customers when they signed up, and we’re pleased to see Ofcom investigate the issue.”
“Given the cost of living pressures on consumers, Which? is calling on telecoms firms to allow customers to leave their contract without penalty if prices are hiked mid-contract – regardless of whether or not these increases can be said to be ‘transparent’ – and to carefully consider what level of mid-contract price hikes can be justified.”