BT is currently under investigation for hiding inflation-busting price increases in its contracts. Customers are now bracing for a sharp rise in their bills.
Ofcom stated that it would investigate whether Plusnet, the telecoms giant, failed to warn customers about upcoming price increases.
The regulator already initiated an investigation into similar breaches by BT’s mobile network EE.
New rules that were implemented in June require telecom companies to provide a one-page summary of the key terms of a customer contract before signing it.
It should include information about any price increases during the mid-contract period and show an example in pounds showing how much the customer might have to pay.
This information must be provided free of charge by providers to customers with disabilities who require it in an acceptable format, such as Braille or large print.
Ofcom began its investigation into EE in October. However, it said Monday that it would expand the probe to Plusnet once it has received more information about possible breaches.
Customers are being forced to scrutinize contracts as they prepare for dramatic increases in mobile and broadband payment costs that will increase their average annual bill by more than £50.
After the latest inflation figures revealed that UK prices have risen by more than 10pc, customers of BT, Vodafone, and Three will see a 14.4% increase in April. The prices of telecom companies are linked to the consumer price index plus an additional 3.9pc.
Virgin Media O2 customers will see their bills rise further because they are tied to the retail price index (RPI), currently at 13.4pc. Virgin Media O2 contracts stipulate that prices will rise by RPI plus 3.9% each year.
The large price hikes in internet and mobile services have been defended by both companies. They claim they must cover rising costs, and argue that contracts still provide good value.
However, the ballooning costs have provoked a backlash by politicians and consumer groups as well as more rigorous scrutiny by Ofcom.
Michelle Donelan, Culture Secretary, said this month that imposing price increases above inflation were “not right”. She also stated that she would be writing to companies.
Ofcom is conducting an industry-wide review into whether providers were upfront enough about price increases in contracts. These investigations include BT. This investigation includes contracts that were signed between March 1, 2021, and June 16, 2022.
A spokesperson for BT Consumer said that the company wanted its customers to be fully informed. We make sure sales information is clear, transparent and upfront. During this investigation, we are fully engaged in discussions with Ofcom.
