EE and O2 WILL increase your contract every year!
jabbamk1
Posts: 8,942 Forum Member
✭
O2 recently announced that they would write mid contract price increases into the actual T&C of their contract. This meant that anyone who wanted to sign up to an O2 contract after January 23rd would have to explicitly agree that they wouldn't mind O2 increasing their contract in line with RPI every March. The first price increase took place last month and allowed O2 to increase all customers line rental by 2.7%.
Ofcom have taken steps to try and ban mid contract price increase by introducing new rules which allow customers to cancel their contracts free of charge if a network attempts to increase the contract price during the minimum term. Whilst networks such as Three and Tesco have followed Ofcom guidelines and promised to stop mid contract price increases, O2 (as described above) found a loophole and continue to increase prices whilst not allowing their customers to cancel.
EE have recently announced they will be following in O2's footsteps and any customer that signs up after March 26th will be subject to an RPI increase every March. This means if you buy a new contract with EE, you are explicitly agreeing for EE to screw you over every year and increase your price plan. There is nothing an EE customer can do about this, they cannot cancel without paying the early termination fee.
But don't think that if you signed up before March 26th that you're safe. If you signed up earlier then you can expect a 2.7% RPI increase in May of this year. So all EE customers are affected by this and will continue to be so every year. As an EE or O2 customer your price plan will continue to increase every year and there is nothing you can do apart from pay the extra money.
Will Vodafone follow in O2 and EE's footsteps? Maybe?
Should Ofcom do something to prevent this? Well they already have and a loophole has allowed O2 and EE to do exactly what Ofcom were trying to prevent.
It looks like mid contract price increases are here to stay. If you're against mid contract price increases then Three and Tesco are the best choices right now.
Ofcom have taken steps to try and ban mid contract price increase by introducing new rules which allow customers to cancel their contracts free of charge if a network attempts to increase the contract price during the minimum term. Whilst networks such as Three and Tesco have followed Ofcom guidelines and promised to stop mid contract price increases, O2 (as described above) found a loophole and continue to increase prices whilst not allowing their customers to cancel.
EE have recently announced they will be following in O2's footsteps and any customer that signs up after March 26th will be subject to an RPI increase every March. This means if you buy a new contract with EE, you are explicitly agreeing for EE to screw you over every year and increase your price plan. There is nothing an EE customer can do about this, they cannot cancel without paying the early termination fee.
But don't think that if you signed up before March 26th that you're safe. If you signed up earlier then you can expect a 2.7% RPI increase in May of this year. So all EE customers are affected by this and will continue to be so every year. As an EE or O2 customer your price plan will continue to increase every year and there is nothing you can do apart from pay the extra money.
Will Vodafone follow in O2 and EE's footsteps? Maybe?
Should Ofcom do something to prevent this? Well they already have and a loophole has allowed O2 and EE to do exactly what Ofcom were trying to prevent.
It looks like mid contract price increases are here to stay. If you're against mid contract price increases then Three and Tesco are the best choices right now.
0
Comments
Seems like a silly thing to overlook.
Effectively you're signing up to a "flexible" contract that allows the network to change the price every 12 months in line with RPI. They also have to tell you this at point of sale.
Hence why the O2 website now has this on the checkout page-
And the EE website now has this on the phone/SIM selection page-
But how many people are going to read that small text at the bottom of the page?
How many telesales agents are going to tell customers that their price will increase every year?
How many store staff will tell customers that they're signing a contract that allows the network to screw the customer over?
My guess, people are going to complain as always come price increase time as it being something that they didn't realise would happen and something that shouldn't happen.
Every company is more interested in their profits more than their customers, shareholders first, customers second. £££££$$ Three will be next..
Some are clearly more interested than others. At least providing 3G in more than just towns and cities. Three have also pledged not to raise prices for contract customers.
At what point will consumers finally say you know what I am going to move to Tesco or Three in droves to teach EE and O2 that they cannot just keep increasing prices every year.
Unfortunately we the public have got so used to it along with increases in fuel that we complain about it but don't actually do anything about it or definitely not enough to make an impact.
I think it won't be long before Vodafone announce changes to their T&C's even though they have agreed like 3 there will be no mid-term price increases.
Lots of things increase in price though, that's why we have an inflation rate, of course the networks have to pay for things as well and consumers are using a lot more data, which costs money to deliver. 4G costs the networks hundreds of millions, not just in licencing, but also in infrastructure improvement.
I can see the case for small increases, but putting it up by RPI is a bit much, especially as wholesale costs are reducing for the networks. RPI is a measure of the whole retail sector, including fuel I think and isn't always representative of some areas like mobile where there are savings to be had in the background like infrastructure shares etc.
I think Ofcom thought that the networks should be able to price accordingly and estimate costs for the 2 years ahead so that consumers knew what the fixed price of the contract was, a couple of networks had different ideas through!
RPI as far as I am aware is not used anymore by the retail sector and it's now replaced by CPI http://www.significancemagazine.org/details/webexclusive/4228261/RPI-versus-CPI-whats-the-difference-Why-does-it-matter-Will-it-make-you-poorer-o.html
But I digress and you do make some valid points there will always be increases due to inflation but it feels to me that O2 and EE have latched onto RPI as a guaranteed way to increase the line rental every year without fail and this is what I feel is taking the you know what and there is nothing the consumer can do as it's now part of the T&C's when you sign up.
It sounds like OFCOM had the best of intentions but O2 found a way around it and EE are now following in their footsteps. And if these increases happen every year which I have doubt they will then that will only drive up the price of the contract you sign up to each year as well so no matter what everyone pays more.
People say it's only a negligible amount of £0.75 to £1.99 each month but it all adds up and by the time my daughter is old enough to have a phone (quite a few years to go!) I would hate to think what the price will end up being.
How can you get a pac code every 12 months if you sign up for a 24 month agreement or am I missing something?
Exactly, in a typical 2 year contract you can be hit by a 5% increase over the contract period. I love the way they're automatically charging you extra just because RPI has increased, even if their industry / sector has not, or if their costs are down etc.
If they released a breakdown of the extra costs they are incurring due to RPI then I am sure the consumer would probably be ok with it but for them to just state it's going up and no more information is a bitter pill to swallow.
At the end of the day prices will always increase but it's at the rate they are increasing which is the most worrying for me.
Do you think that once they have all done investing in 4G the RPI increases will stop? I think they will never stop personally and the days of contracts starting from £4x will soon become £5x for the high end handsets (S5, Z2, One, 5S etc)
For a breakdown just look at your own household bill.
Electric
Gas
Water
Rents
Insurances
Then they have staff overheads
At least you know the score every month
That article needs to be updated with the fact that EE customers who signed up after 26th of March 2014 will face yearly RPI increases.
Perhaps ban was too strong a word. But under the new and clearer rules, Ofcom were trying to make it possible so that if a network were to raise its prices mid contract then the customer would be able to walk away free without needing to pay any early termination fee. Hence they were pretty much putting their foot down and pretty much "banning" mid contract price increases otherwise networks could see a huge majority of customers leave without paying their contract.
Obviously O2 and EE have gone against this and are not allowing customers to leave/cancel their contract free of charge if they raise the price during the contract.
Your way of thinking is wrong here tbh.
Companies have a legal responsibility to act in the best interests of their shareholders and if they don't run the risk of legal action.
I love the way they hike prices on existing contracts whilst allowing new customers to signup at the original price. Demonstrates perfectly the kind of thought that goes in their decisions.
Totally agree the new contracts have the price increase already in place at the same price as the original contract before the price increase.... go figure!
They don't.
Last time O2 hiked my contract price new customers had to pay the same increased and awkward amount (37.04 or something).
But that tariff was withdrawn shortly thereafter and replaced with the whole "Refresh" shenanigans.
At the end of the day fixed should mean fixed not fixed until March before we put it up by x.y%
You certainly would never get a decrease in your tariff if the costs go down for a network whilst you are in contract and it's the same for all utility companies but the second their costs go up we get hit by it.
If you are signing a variable price contract on O2 or EE then any cost savings should definitely be passed onto the consumer be it cash back or a monthly discount (not including loyalty bonuses etc)
Indeed. I bet if the economy did start to go into deflation, I bet the prices wouldn't reduce. So why should they increase with inflation? Its a joke.