Ofcom: Inflation-linked telecoms contracts banned from 17 January 2025

According to news on July 23, Ofcom, the British Communications Authority, released new consumer protection rules on the 19th local time of this month: starting from January 17, 2025, telecom operators are prohibited from adding inflation-linked prices to contracts provided to customers. price increase clause. Ofcom has also asked telecoms operators to clearly and transparently set out when contract packages will change, in pounds and pence, from the same time.

Example of contract changes

There are currently a significant number of telecoms contracts in the UK that adjust their prices on 1st April each year. Specifically, the increase is the previous year's CPI (Consumer Price Index) or RPI (Retail Price Index) increase that reflects the level of inflation, plus a fixed value that is usually 3.9%.

Ofcom believes:

• This method of adjusting prices does not provide sufficient clarity and accuracy for customers.
• Customers unfairly bear the risk of uncertainty caused by inflation in this type of contract.

The survey shows:

Among consumers who accept inflation-linked contracts, only:

• 16% of broadband customers
• 12% of mobile customers

know the specific price increase rules.

Cristina Luna-Esteban, director of telecoms policy at Ofcom, said:

“With household budgets tight, people need to be sure of their monthly expenses. But if you It's impossible to do this with a contract where prices may change due to unpredictable factors such as future inflation

We are stepping up on behalf of phone, broadband and pay TV customers to put an end to this practice so people can. can determine their spending, compare contract prices more easily and benefit from the UK’s highly competitive telecoms market.”

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