Residential and small business customers will be able to end their landline, broadband or mobile contract without penalty if prices are increased mi-contact under new rules published by Ofcom.
The new rules follow the telecoms regulator’s consultation earlier this year and come into effect on 23rd January 2014.
They apply to any new landline, broadband, and mobile contracts (including in some cases bundled contracts) entered into after that date.
As well as protecting users from direct price increases, the rules will prevent providers from reducing calling, text and download allowances without also reducing prices.
However the rules wont stop price increases for out of bundle charges – such as extra phone calls – and monthly add-ons.
Ofcom says freezing prices while reducing allowances would be classed as a backdoor price increase.
Service providers will also need to ensure customers are told of their rights and that all notifications of price increases be clear and easy to understand.
Claudio Pollack, Ofcom’s Consumer Group Director said: “Ofcom is today making clear that consumers entering into fixed-term telecoms contracts must get a fairer deal. We think the sector rules were operating unfairly in the provider’s favour, with consumers having little choice but to accept price increases or pay to exit their contract.
“We’re making it clear that any increase to the monthly subscription price should trigger a consumer’s right to leave their contract – without penalty.”