Martin Lewis issues phone and broadband bill warning to millions of Brits as he demands law change
Millions of broadband and mobile customers are paying more than they should because of Ofcom's new rules on mid-contract price rises, according to research by MoneySavingExpert (MSE).
The findings come as money expert Martin Lewis appears before MPs today (29 June) to call for a change in the law.
Besides reminding people to take an important photo at home, he now wants the Government and Ofcom to ban above-inflation price rises during fixed-term broadband and mobile contracts.
As reported by MSE, Ofcom’s rule-change last year was that providers must tell customers exactly how much their bills will increase before they sign up.
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Instead of linking rises to inflation, firms now state a fixed amount, such as an extra £4 a month every April.
MSE says new system has made things worse
After analysing more than 47,000 mobile and broadband deals, it found that three out of four tariffs now cost more than they would have under the old inflation-linked system.
People on cheaper contracts have been hit the hardest because the fixed increases make up a much bigger percentage of their monthly bill.
For example, someone who took out a Vodafone mobile contract for £10 a month in December 2024 has seen their bill rise to £13.60 after two £1.80 increases.
Under the old pricing system, they would now be paying around £11.40 instead.
Martin Lewis' solution
“This was frustratingly predictable,” Lewis said. “Let's be plain, it provisionally looks like the regulator's intervention resulted in most contracts costing more.
“Transparency only goes so far, we don't want customers overpaying just because they were told about it first.
“The solution has always been bleedin' obvious. Just ban above-inflation mid-contract price hikes.
“Of course, many, including me, would prefer a ban on any mid-contract rise, as the price you sign up for should be the price you pay over the length of the contract.
“Yet that risks possible market distortion, as firms may lift initial prices as a provision against unexpected costs mid-contract.”
'Just scrap the whole thing'
Lewis explains that ‘a simple, 'no rises above inflation' rule seems a reasonable compromise’ as MSE research shows ‘compared to Ofcom's solution, if this had been in place it would've meant lower rises for over 99 percent of people’.
“There was a chance to fix this last year. The Government called Ofcom and providers around a table to write a 'Telecoms Charter' on the back of me and others shouting about O2's outrageous 'price hike on a price hike' – when it increased costs mid-contract by even more than it'd pre-announced, using the loophole that allowed this if it let people leave within 30 days of notification,” he added.
“Yet all that resulted in was firms promising they wouldn't do hikes on hikes. It didn't stop the Sky carve-out, which lets it ignore transparency rules, so long as it lets people leave within 30 days of notification.
“If that rule must stay, at the very least there should be two windows – you should be able to leave within 30 days of notification and again within 30 days after the price rise, which is when many people actually notice it.
“Better still though, just scrap the whole thing and ban rises above inflation.”
Topics: Money, Martin Lewis
Anish Vij