"In January, new rules were brought in to stop phone and broadband companies raising prices in the middle of a contract without warning. O2 said it has not gone against the regulation and that Ofcom's rules "do not prevent companies from increasing annual price changes for example, to invest in improving networks". The company said it spends 700m a year on improving infrastructure and customers can leave their contracts without a penalty."
"But consumer expert Martin Lewis said he was "up in arms" over the move, which was "making a mockery of Ofcom". He said on The Martin Lewis Podcast he believed this would lead to other companies following suit. "O2 customers' prices are going up - but likely it means the door is open for all of us to now see prices by more than we were told when we signed up," he said."
"On Wednesday, O2 emailed its customers to say it would be increasing the price of their contracts by 2.50 a month from April. It had previously advertised that monthly prices would only go up by 1.80. "Today, we've written to the major mobile companies reminding them of their obligations to treat customers fairly," Ofcom said. "We encourage any customer who wants to avoid these price rises to exercise their right "
Ofcom criticised O2 for raising contract prices by more than customers were initially told. New rules introduced in January aim to stop phone and broadband companies increasing prices mid-contract without warning. O2 maintained it had not breached regulation, saying Ofcom's rules "do not prevent" annual price increases to fund network improvements and noting it spends 700m a year on infrastructure. O2 offered customers a 30-day window to leave contracts without termination charges, though handset costs remain payable. Consumer expert Martin Lewis condemned the move and warned that vulnerable customers may miss the exit window, while Ofcom reminded firms of customer fairness obligations.
Read at www.bbc.com
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