Full fibre broadband operator Hyperoptic has called on Ofcom to investigate mid-contract price increases imposed by its rivals, arguing that affected customers should be able to exit their tariff without penalty.
Current rules state that providers cannot increase monthly fees during a minimum term, however Hyperoptic says many firms avoid this by inserting annual prices increases into the small print. Often this is an increase in line with inflation with a fixed percentage.
BT, for example, reserves the right to increase prices by inflation and 3.9%.
Broadband price rises
However, Hyperoptic says this is misleading and with inflation at a 30-year high, some consumers are paying 10% more than what they signed up for following increases introduced on 1 April.
The company has written to Ofcom, saying that consumers should have greater freedom to switch and should make any potential future price rise far more obvious. It cites Ofcom’s own regulations that state “any price variation clause must be sufficiently prominent and transparent at the time of purchase, so that the customer can be informed of their contract working in this way.”
Of course, any changes in the rules would be to Hyperoptic’s benefit given that it has pledged not to increase prices mid-contract.
“Households are already hurting from inflationary pressure on core products like food, petrol and energy,” declared James Fredrickson, Director of Policy, and Regulatory Affairs, Hyperoptic. “It is then startling to see that the majority of broadband customers are unaware of being locked into price rises of this scale.
“It is imperative that Ofcom, as our industry regulator, urgently investigates industry compliance with the rules governing price variation clauses. As part of that, Ofcom should also consider making these price increases far more visible to customers – with a view to ultimately giving them the right to leave their agreement without charge should they feel that they could get a better deal elsewhere.”
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