Consumer Expert Highlights Critical Flaws in New Telecoms Regulations
England has introduced new regulations governing broadband and mobile billing practices, but prominent consumer advocate Martin Lewis has raised serious concerns about what he describes as "two glaring gaps" in the protections. The Labour government has established a Telecoms Consumer Charter through agreements with major telecommunications providers, aiming to address longstanding consumer issues in the sector.
Mixed Response to Regulatory Improvements
Martin Lewis, the well-known financial journalist and broadcaster, expressed cautious optimism about certain aspects of the new charter while simultaneously identifying significant weaknesses. "I am cautiously optimistic that the 'Telecoms Consumer Charter' represents an improvement within the narrow range of issues it addresses," Lewis stated in an official comment shared on social media platform X.
The consumer expert revealed that the charter development was partially prompted by his direct communication with government officials regarding O2's controversial "price hike on a price hike" practice. This involved customers being informed about mid-contract price increases at sign-up, only to later receive notifications about additional, unexpected rises that circumvented existing Ofcom protections.
The First Major Gap: Unlimited Price Increases
Lewis identified the first significant shortcoming as the charter's failure to limit the actual size of mid-contract price increases. "Transparency doesn't stop price rises," he explained. "Firms that follow the rules now simply have to tell customers, in pounds and pence, how much prices will rise by mid-contract."
While this represents improved clarity for consumers, Lewis emphasized that it provides no actual cap on how much providers can increase prices. "In many cases, customers have seen bigger rises under this system than under the old inflation-linked model," he noted, highlighting how the new transparency requirements might actually enable larger price increases than previous arrangements.
The Second Major Gap: Variable Pricing Loophole
The second critical gap involves what Lewis describes as the "variable pricing" loophole that continues to allow certain providers to implement mid-contract changes. "Sky continues to operate using a variable pricing structure, meaning customers can face mid-contract price changes, albeit with the right to leave within 30 days of notification," he detailed.
Lewis pointed out the practical limitations of this supposed protection: "Yet in practice, many people only notice the increase once it hits their bill, not when the notification arrives – making that protection far less effective than it appears." This creates a situation where theoretical consumer rights provide little practical benefit against unexpected billing increases.
A Proposed Simple Solution
The consumer champion offered what he considers a straightforward resolution to these issues. "I don't understand why we don't grasp what is by far the simplest and most effective solution: ban firms from increasing prices above inflation during a fixed-term contract," Lewis asserted. "Do that, and the job's done."
Lewis concluded that despite some positive developments in social tariff awareness and transparency requirements, the charter fundamentally fails to address what he considers the core problem: "Both effectively embed above-inflation mid-contract price hikes into the mobile and broadband system – the very mischief the reforms were meant to fix."
