If your mobile phone provider raises the price of your contract, currently you can’t exit the contract if you’re still within your minimum term without incurring a penalty fee.
But, with the help of thousands of you who pledged your support to our Fixed Means Fixed campaign, this will soon change. Read on to find out more.
Cancel a mobile contract
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.
At the moment, there are 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, 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.
For more information, see our guide on cancelling a contract.
Challenging price hikes
Which? believes 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.
If you're looking for a new contract, we would suggest you wait until 23 January to ensure the new rules apply to your new contract.
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 will be 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, due to come into effect in March 2014.
We're disappointed by this announcement as we think it goes agains 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.