Martin Lewis slams O2 for ‘mockery’ of Ofcom rules
Currency expert Martin Lewis has criticized O2 for announcing unexpected price rises that will affect up to 15.6 million customers next year.
The mobile provider will increase monthly payments by £2.50 for all customers in April; this is a 40 per cent increase on the £1.80 stated in the contracts.
Telecommunications regulator Ofcom introduced new rules in January designed to deter surprise mid-contract price increases like this.
Phone providers must now tell customers exactly how much their bills will increase over the life of the contract, or allow customers to end their contracts if a larger increase is announced. Sky confirmed at the time that it would choose the second option for its broadband deals; O2 now appears to be taking a similar stance.
Although the mobile service provider was not breaking the rules by allowing customers to leave, Mr Lewis reacted angrily, saying the decision made a “mockery” of the new guidelines.
“This is absolutely ridiculous,” he told ITV Good morning England. “O2 must be hanging its head in shame and I say most of its customers must be there now because once you are informed about this you can walk away with impunity checking to see if you can get a cheaper deal elsewhere.”
He later added: “The concern is that now that O2 has opened the door to this behaviour, other mobile firms will be less concerned about following suit. It is a great regret that Ofcom, when consulted on these changes, did not listen to my and others’ proposal to simply ban above-inflation, mid-contract price increases (or any mid-contract price increases).”
Ofcom said it was “disappointed” by O2’s decision, which was “against the spirit” of the rules.
“Today we wrote a letter to major mobile companies reminding them of their obligation to treat customers fairly.” he said in a statement. “We encourage all customers who wish to avoid these price increases to exercise their right to exit without penalty and sign a new agreement.”
The regulator advises consumers to remember that their mobile provider must give them 30 days notice of any price increase beyond what is agreed in the contract, in which case they should be allowed to exit the contract without penalty.
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This will enable them to shop around for a new contract with any provider, and Ofcom recommends using comparison sites to ensure the best deal can be found.
An O2 spokesman said: “As acknowledged in Ofcom’s letter to providers, its rules do not prevent companies from increasing annual price changes – for example, investing in improving networks. “The changes we have announced do not breach regulatory rules in any way.
“We recognize that price changes are never welcome, but the demand for mobile connectivity is greater than ever and any price changes customers see on their bills are hugely outweighed by the £700 million investment we make in our mobile network each year to meet this growing demand. We have written directly to our customers about this change and they can opt out if they wish without penalty.”
