Three has been told by the Advertising Standards Authority to do more to warn customers about potential future mid term contract price rises in its advertising, after finding a recent campaign to be misleading.
The ASA acted after a customer received a leaflet from Three outlining available offers. The leaflet highlighted the One Plan, available at a cost of £30 per month, but there was no mention that the price of the plan could be raised at any point during the contract.
The issue of mid term price rises has been a hot topic in the last year, with all five major networks bringing in contract price rises to consumers who thought that their contracts would remain at a fixed rate for the duration of minimum contract term.
The issue has lead many customers to complain to OfCom, who have launched a consultation into the issue. Consumer Watchdog Which? has also launched a campaign, called Fixed Means Fixed, calling on the networks to keep prices at a fixed rate during the contract term.
General price rises can be a cause for early contract termination, however the terms and conditions of pay monthly contracts allows for price increases in line with the Retail Price Index. The problem is when networks fail to highlight this clause to customers, who only find out when the prices increase.
In response to the ASA, Three pointed out that it had the right to increase prices in line with the rate of inflation, which was outlined in the terms and conditions of the contract. However, the ASA ruled that because the monthly cost was highlighted along with the duration of the contract, customers would reasonably assume that the price was fixed.
In addition, as the price of the contract is important to customers, the potential for a price increase needs to be made clearer.
In response to the ruling, a Three spokesman said: “Our ability to increase recurring charges in line with RPI is set out in our terms and conditions. We note the decision on a leaflet which was published in 2011. OfCom is about to consult on price rises within the lifetime of a customer contract. We believe this is an opportunity to bring greater clarity and consistency across the industry for consumers rather than relying on an ad hoc decision on individual communications.”
To pledge your support for the Which? campaign, and for more information, see the Fixed Means Fixed website.
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