New rules to let you cancel contracts with no penalty when prices rise

Ofcom is clamping down on mid-contract price hikes, so the next time your provider decides to whack up its line rental, you’ll be able to wave them goodbye and switch to a better deal elsewhere - with no pesky fees to pay…

Broadband and phone providers in the UK will no longer be allowed to increase their prices while customers are locked into contracts with no escape, under new rules set out today by the telecoms industry regulator Ofcom.

The new guidelines, which come into effect at the end of January 2014, mean you can cancel your landline, broadband or mobile phone contract without penalty if your provider bumps up the cost of your monthly package.

You'll be given at least 30 days' notice of any such price increases, allowing you to shop around for a better deal before switching to a new provider.

It's a massive victory for anyone with a broadband, home phone or mobile deal, as until now there was little option but to pay the new, higher prices, other than handing over more cash to leave a contract early.

Ofcom director Claudio Pollack said: "We're making it clear that any increase to the monthly subscription should trigger a consumer's right to leave their contract."

Dominic Baliszewski, our telecoms expert, added: "Ofcom's announcement is a long overdue victory for broadband, mobile and landline customers.

"Price rises may be an unavoidable fact of life, but when a customer gives up their freedom to switch by signing a contract at a set monthly price, that is the price they should continue to pay until the end of the contract term.

"Moving the financial goalposts, however little, is unfair on customers - after all, if you bought a plane ticket to New York you wouldn't expect to be charged an additional amount halfway over the Atlantic."

One point to be aware of is that, if customers do decide to switch following a mid-contract price rise, they'll only have a 30-day window in which to do so.

Baliszewski continued: "The new rules will not be fully implemented until three months from now, so customers should keep their eyes peeled for any further price increases between now and then.

"Anyone who finds themselves on the receiving end of a price hike should use an Ofcom-accredited price comparison website to ensure a speedy, seamless switch with no interruption in service."

Today's announcement comes just a few weeks after BT revealed it would soon be increasing its home phone line rental charges.

From January, standard BT line rental will be £15.99 per month.

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