Ofcom proposes ban on inflation-driven mid-contract price rises

It comes off the back of concerns from the industry regulator that customers’ contracts do not provide sufficient certainty about the prices they’ll pay, with most major phone, broadband and pay TV companies now including mid-contract price rises linked to future inflation.  

The new rule would mean any price written into a customer’s contract would need to be set out in pounds and pence – prominently and transparently – at the point of sale. That includes being clear about when any changes to prices will occur.  

Ofcom’s chief executive Dame Melanie Dawes said: “At a time when household finances are under serious strain, customers need prices to be crystal clear. But most people are left confused by the sheer complexity and unpredictability of inflation-linked price rise terms written into their contract, which undermines customers’ ability to shop around. 

“Our tougher protections would ban this practice once and for all, giving customers the clarity and certainty they need to secure the best deal for their needs and budget.” 

The proposals are now up for consultation, with this closing on 13 February 2024. The regulator then plans to publish its final decision in spring 2024.

Subject to the responses it receives, it intends for the new rule to come into force four months after the publication of its final decisions.