O2 Changes Tariff Terms to Evade Regulatory Rules
Published on: 26th Jan 2014
UK based O2 has modified its tariff terms and conditions in a way that enables it to avoid letting customers end their contracts if it puts prices up in the middle of a contract.
Last week, the regulator, Ofcom introduced a new rule that any price rise had to come with an option for the customer to terminate their contract without penalty.
Before that change, O2 had a clause in its contract saying that it might rise a monthly tariff in line with inflation once a year.
The new change is subtle, in that they now say that they will raise tariffs in line with inflation. What was once a may-be, is now a certanty.
Writing that into the contract and making it a guaranteed event also gets around the telecoms regulator's new rule, although that rule would still apply if O2 were to raise prices by more than the Retail Price Index (RPI) rate of inflation.
"An increase of this kind does not entitle you to end your agreement mid-contract," the company confirmed. "As set out above, our terms for customers signing up both pre- and post- 23rd January allow us to apply a price increase to reflect RPI."