You can now cancel your contract for free when prices go up

New rules come into force tomorrow that allow you to escape from phone and broadband price hikes by ending penalties.

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You can now cancel your contract when your phone or broadband tries to hike the prices. New rules come into force tomorrow that allow you to escape from price hikes by ending eye-watering penalties for trying to get out of your contract.

New rules from telecoms watchdog Ofcom mean broadband, landline or mobile phone contracts taken out from tomorrow onwards must give at least one month's notice if the agreed monthly subscription price changes, and must allow you to leave without penalty if you decide you don't want to pay the new price.

Current contracts aren't covered, however, so if your bill is increased before you start a new contract or renew your existing one, you're stuck with either swallowing the new charges or paying the remainder of the contract to escape.

Ofcom also mentions contracts that have a price change included from the start -- such as an introductory discount for the first couple of months before reverting to the regular price -- making it clear that the new guidelines can't be used to wriggle out of such a contract when the price changes.

"This move is extremely welcome," says telecoms expert Ernest Doku of uSwitch.com. "Mobile customers can breathe the biggest sigh of relief as their contracts tend to be the longest. Hopefully it will make providers think twice about increasing prices -- they don't want to lose customers two months into a 24-month contract, for example -- but even if this move doesn't stop prices going up, at least it gives consumers some power back."

Doku sounds some warning notes, however. "There could also be repercussions for mobile customers who got a 'free' handset with their deal: will they have to return it or buy it outright if they leave, or will we see the end of free devices? And as for those who've signed up to mobile, TV and broadband bundle deals, what happens if just one service becomes more expensive?

"But although the devil may be in the detail, ultimately this move is a real win for consumers."

Have you been hit with price hikes lately? What do you think of your network? Tell me your thoughts in the comments or on our Facebook page.

 

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