It has been revealed that millions of mobile and broadband customers are caught in a trap 22, either paying punitive price increases of up to 25 percent or eye-watering egress fees.
The warning comes from Which? and follows industry announcements of extraordinary price increases in April and May that will affect customers.
Most mobile and broadband companies are planning average price increases of 13 to 14 per cent, however some customers face much larger increases that could add more than £200 to annual bills.
O2 customers face an increase in mobile phone usage of 17.3 percent, while some broadband and TV packages at sister company Virgin Media will increase by as much as 25 percent.
Tech companies can get away with it because they have clauses in the fine print in their contracts that allow them to raise prices for inflation plus an additional 3.9 percent.
Millions of mobile and broadband customers are caught in a trap 22, either paying punitive price increases of up to 25 percent or eye-watering egress fees.
In most cases, customers who want to escape these increases are hit with contract termination penalty charges, which can exceed £400.
Telecoms watchdog Ofcom has asked mobile and broadband companies to rein in price hikes due this spring due to the cost of living crisis, however major players have refused to do so. .
Which? Policy and Advocacy Director Rocío Concha said: “It is very worrying that many customers may find themselves caught in a catch-22 situation where they have to accept exorbitant, and difficult to justify, price increases mid-contract this spring. or pay expensive exit fees to end your contract early and find a better deal.
“With many households struggling to make ends meet, it is completely unfair that people are stuck in this situation.
‘Which? is asking suppliers to act quickly and reconsider any price increases. Businesses should cancel 2023 increases for financially vulnerable consumers and allow all customers to leave without penalty if they face mid-contract price increases.
EE, Vodafone and Three are raising prices by the CPI inflation measure plus 3.9 percent. This equates to an average increase of around 14 percent, although the figure will vary depending on the customer’s package.
Which? he said the average EE customer would see a £66.36 annual increase, while the typical Tres customer would see a £56.40 increase on their combined contract.
The consumer champion said an EE customer would face eye-watering exit fees of £424.67 to end their contract a year early and a Three customer would have to shell out an exit fee of £379.46.
O2 customers are facing a 17.3% increase in mobile phone usage amid industry announcements of extraordinary price increases in April and May.
Virgin Media, O2’s sister company, will increase the prices of broadband and television packages by up to 25 percent.
O2 and Virgin Media use the measure of high RPI inflation plus 3.9 percent as the basis for their price increases, meaning the average increase in mobile phone contracts will be 17.3 percent.
A Virgin Media broadband customer complained that the company planned to increase its monthly package, which covers landline, internet access and basic TV, from £35 a month to £44, a 25 per cent increase. .
Another broadband customer who currently pays £100.50 per month for internet, TV and phone has been told this will increase by £21.50 per month from May, representing an increase of 21.4 per cent or £258 per year.
Mobile and broadband giants say they are helping low-income customers by limiting price increases on basic services.
EE said: ‘We understand that price increases are never desired or welcome, but we recognize them as necessary given the increasing costs facing our business.
‘EE has been upfront about price changes when customers agreed to their contract and before a price increase, so customers always know where they are.
“Vulnerable customers experiencing financial hardship or digital exclusion are protected through our market-leading social rates.”
Which? he said the average EE customer would see an annual increase of £66.36, while the typical Three customer would see a £56.40 increase on their combined contract
Virgin Media O2 said: “We know price increases are never welcome but unlike some other providers we are freezing the cost of device redemptions and are only changing our airtime prices.”
“These changes occur as the costs of our own business rise and we invest heavily in our mobile network to keep pace with increasing usage, deploy new technologies like 5G, and deliver valuable services that are important to our customers, whether they are Flexible plans, European roaming included or access to exclusive events and savings through Priority.’
O2 said most of its contracts are for 12 months or less, so it is unlikely that most of its clients will face a high 12-month exit fee. Vodafone declined to comment.
Three UK said: ‘We understand that the cost of living crisis is having an impact on our customers today. However, with the substantial increase in energy and supplier prices and the significant increase in network deployment costs across the board, we have made the difficult decision to pass some of this increase onto the bills of our customers.