Every year, we speak to people who are worried their contract will increase in price half-way through as well as others who have just had news of a hike. Today, we’re going to assess your rights and what it means for your contract when the provider decides to increase their prices.
Cancelling Your Mobile Contract
As long as the increase to your monthly rate is above the RPI (Retail Price Index), you shouldn’t receive a penalty for leaving your contract within the minimum term. In general terms, the only time you can guarantee an avoidance of the penalty is if you cancel during the cooling-off period.
As soon as this period ends, you’ll need to see out your contract or else face a penalty if you try to leave and this is because the provider needs to protect their investment.
How does it work? Let’s say you’re three months into an 18-month contract, you would have to pay for the remaining 15 months to leave the contract entirely.
However, these fees can sometimes be removed if the operator has breached their contract or made changes of which you weren’t aware at the beginning. For example, an increase in price above the rate of RPI would allow you to challenge the contract.
Dealing with a Price Change
Thanks to Ofcom, we have several rules and regulations that protect our rights as consumers. With mobiles, broadband, and landline, we can now leave contracts without paying a penalty if the prices increase half-way through.
As we’ve mentioned throughout, this generally applies to all increases but especially when the rate is higher than the increase in RPI.
If the increase is in line with the RPI, you’ll need to check the terms and conditions to see whether or not they warned of potential increases. If they gave fair warning, the charges would still apply.
If you’ve surpassed the minimum term of contract, this is another way to leave without paying. In all circumstances, we recommend getting in touch with your provider since they’ll have all the information you need; you’ll probably need to give notice before leaving.
January 2014 – For all contracts of this nature, 23 January 2014 is an important date because the rules don’t apply to contracts taken before this date.
If your fixed contract started after this date, you won’t have to pay penalties to leave your contract unless it was put to you at the point of sale that price increases would be occurring mid-term.