A MAJOR mobile provider is AXING sneaky mid-contract price hikes ahead of new rules.
Vodafone will no longer apply inflation-linked price rises for consumers and some small business customers.
This change comes in response to an Ofcom consultation that emphasised the need for transparency in mid-contract price increases.
It means from, July 2 2024, Vodafone will inform customers upfront about the exact cost of their contracts in pounds and pence, including when price rises will occur.
However, the change will only affect new customers of those renewing a contract with the telecom provider after this date.
How to tackle thorny first date subjects… and why you should watch the waiter
For instance, customers who sign a contract in August 2024 will have their bills adjusted in April 2025 and then again in April 2026 by a predetermined amount:
- From £1 more per month for mobile services
- £3 more per month for broadband
Vodafone has said that price increases will not be applied to customers identified as financially vulnerable or those on social tariffs.
This includes customers on Vodafone's social broadband tariff dubbed "Vodafone Essentials".
Pay-as-you-go users won't be affected by the change as they aren't signed up to a fixed contract.
Vodafone serves over 18million UK households and offers home broadband services to 3million customers.
It comes just weeks after Sun Money took a deep dive into the firms hiking fixed deals by up to £50.
WHO WILL MISS OUT
Vodafone customers who signed up for a mobile or broadband package before July 2 will still face inflation-linked price rises each April until they switch or change deal.
This means these customers' prices will rise by whatever December's inflation figure is plus 3.9%.
For example, if inflation stood at 3% in December 2024, the price of your contract would rise by 6.9% in April 2025.
This would mean someone paying £25 a month now would see their bill rise by £1.73 to £26.73 a month.
Secret way Tesco staff bag freebies & it’ll have you desperate to work there
As soon as you change your contract after July 2, you will no longer pay inflation-linked price rises.
Rocio Concha, Which? director of policy and advocacy, said: "Which? has long campaigned against unpredictable inflation-linked mid-contract price rises so it's positive that Vodafone has announced it will no longer include these hikes in new contracts from July and will instead clearly set out any increases in pounds and pence.
"However, Vodafone should also give certainty to customers already locked into existing contracts by giving them the option to move to predictable price increase terms as soon as possible."
We've asked Vodafone to confirm if existing customers can switch contracts before April to ensure their deal is covered by the new rules.
NEW RULES ARE ON THE WAY
Ofcom announced last month that firms will soon be ordered to clearly state any proposed price rises during fixed contracts in pounds and pence.
The regulator is seeking to ban firms from including any inflation-linked or percentage-based price rises on all new contracts.
If current plans go ahead, the new rules, which Ofcom has consulted on, should come into effect by October.
Ofcom 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 confused by the unpredictability and complexity 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 mobile customers the clarity and certainty that they need to secure the best deal to suit their needs and budgets."
However, Rocio added: "Other telecoms providers still including these unfair mid-contract price hikes in contracts should do the right thing and adopt Ofcom's proposals to ban these inflation-linked increases as soon as possible.
"Vodafone's announcement also proves that big providers can make these changes quickly so there's no reason Ofcom should cave to industry pressure to delay the ban."
EE and Plusnet, part of BT, have also said that they will no longer raise prices based on inflation — and will instead display them in pounds and pence.
