As we reach the end of a tumultuous year for the UK – and the wider world – we are also seeing the consequences of a pronounced economic downturn.
From councils and businesses to private individuals, everyone is trying to extract more value from existing services and contracts, while ensuring those contracts don’t increase in value.
However, sometimes price rises are inevitable, unavoidable, or simply imposed in the hope customers won’t vote with their feet and take their business elsewhere.
There’s often confusion about whether it’s legal to allow ISP increase prices mid-contract – and uncertainty about consumer rights in that eventuality.
Here’s what you need to know.
The legal stuff
Firstly, if you get a letter from your ISP announcing a mid-contract price rise, they’re legally within their rights to do so.
Some ISPs apply a fixed increase every year, while others have a clause buried in the small print of consumer contract T&Cs which permit a variable increase.
Typically, this is pegged to either the traditional retail price index, or the more modern consumer price inflation, usually with a three to four per cent premium tacked on.
In the latter scenario, you have no right to protest or cancel your contract. However, if your ISP has pledged to apply a fixed increase instead, you may.
This is because industry regulator Ofcom has introduced strict rules on what is and isn’t permissible in terms of price hikes.
Your first step is therefore to read the small print of your current broadband contract, line by line, to check whether potential future price rises were included.
If the contract isn’t clear about price increases, you should be able to exit your contract without attracting penalties for doing so.
This sounds confusing and unfair!
Earlier this month, they launched an industry-wide programme to examiner whether these in-contract price rises are being conveyed to consumers with sufficient clarity.
While we must all bear some responsibility for reading contract paperwork, it’s hardly fair to expect people to remember paragraph 23, subsection 3, bullet ii, clause 8 a year later.
Ofcom tends to take a while to reach a definitive conclusion in such matters, but there is the long-term prospect of clearer information being demanded.
In the meantime, Ofcom has already toughened the rules about clarity in new contracts – though only those which started after the 17th of June 2022.
This is good news for anyone whose current broadband contract is only a few months old, but those of us who entered into a contract before mid-June might well feel aggrieved.
Indeed, an Opinium poll conducted in October revealed over four in five consumers think mid-contract ISP price increases are unfair.
These sentiments have perhaps been sharpened by the growing need to ensure every pound of household income works harder than it did before.
However, since most ISPs are happy to retain the existing system, it’s going to be some time before we receive the clarity we might all hope for in our next broadband contract.