If your mobile phone provider makes any price increase that are more than RPI, you can exit the contract if you’re still within your minimum term without incurring a penalty fee.
With the help of thousands of you as part of our Fixed Means Fixed campaign, for all new contracts from 23 January 2014, you can also exit without penalty for any price rise at all.
Read on to find out more.
Cancel a mobile contract
Generally, the only way to guarantee you’re not penalised for cancelling a contract is to cancel within the cooling-off period.
If you want to cancel a credit agreement, the Consumer Credit Act gives you a 14-day cooling off period to cancel the agreement.
Before 23 January 2014, there were no rules in place that allow you to cancel because of price hikes during your contract.
If you cancel before the minimum contract term is up in this instance, you’ll have to pay an early termination fee. These can be very high.
For example, if you sign up to an 18 month contract and want to cancel in the second month, you may have to pay 16 month's worth of fees.
However, if your contract allows your operator to increase your contract by more than RPI, you could challenge this clause as unfair.
For more information, see our guide on cancelling a contract.
Challenging price hikes
Which? believed it was unfair that millions of mobile phone users were being caught out by unfair price rises.
We wanted the rules changed to all people to exit a 'fixed' contract without penalty if prices do go up.
We also wanted the price, and all other features of a contract (minutes, data etc), to be fixed from the day of agreement to the end of the contract.
With the support of more than 58,000 of you, we convinced Ofcom to take action.
From 23 January 2014, if mobile phone providers want to hike prices on new fixed contracts, you can cancel without paying anything.
See how we did it in our Fixed Means Fixed campaign.
Mobile contracts and RPI
Your mobile phone provider may be able to hike the price of your fixed contract by the rate of RPI (Retail Price Index).
RPI is based on the cost of a theoretical basket of everyday goods and services, and is currently at 3.1%.
However, from 23 January 2014, you are able to exit without penalty if your provider does choose to do this.
Our price rise campaign and 02
02's existing customers
Ofcom's new guidance only applies to contracts taken out after 23 January 2014.
Unfortunately, the new rules permit price rises for existing customers and new customers as long as they're told about this at the point of sale.
As a result, 02 is allowed to raise the monthly prices by RPI for consumers who took out a contract prior to this date.
02 has announced a mid-contract price hike of 2.7% for its eight million pay-monthly customers, which came into effect in March 2014.
We're disappointed by this announcement as we think it goes against the spirit of our Fixed Means Fixed campaign.
02's new contracts
People who take out a new 02 contract after 23 January 2014 are covered by the new Ofcom guidance.
However, 02 has found a loophole - and we're not happy about it.
The loophole allows them to apply annual RPI price rises on the condition that the rise is made clear and at the point of sale, and the price rise is guaranteed.
Although 02's contract variation is within the new rules, we're asking 02 to do the right thing by its customers.
Help us by emailing 02's chief executive and asking him to change his mind.