Some things in life are just plain unfair. One of the things that grinds my gears is how mobile phone and broadband contracts have sneaky T&Cs lurking in them that allow them to increase prices mid-contract. Given that we generally sign up to two-year contracts for mobiles, broadband, wifi and TV streaming, these contract traps force millions of people on to higher payments.

And how. It’s being reported this week that the UK’s main telecoms service providers are planning inflation-busting price increases from April 2023. On top of that, broadband providers are also reputedly intending to introduce mid-contract hikes of between 14% and 17%.

Regulator Ofcom has announced that it will be looking in to mid-term contract rises – but don’t expect that response in time for April.

Can they get away with this?

Can they do this? Yes.

Is it fair/moral/ethical? No.

Mobile phone and broadband companies have become rather cagey about their contracts and what information they share online. This makes it hard to scrutinise the wording of each policy. That in itself should tell you something.

Much of the wording about mid-term price rises in the contracts that I’ve seen is rather opaque and hard to find, even if you know what you’re looking for. But looking at previous price rises, these tend to follow inflation plus up to 4% on top for unspecified ‘costs’. With inflation currently hitting [figure confirmed Wednesday] that means we could have to find up to 30% more cash in our monthly budgets for our mobile and broadband bills.

While Ofcom has suggested incorporating a 30-day window during which we can leave our mobile and broadband contracts without penalty – something that exists in other contracts in different business sectors – that isn’t in play at the moment. And these exit fees can be astronomical. If you’re trying to get out of a broadband contract alone you could be charged hundreds of pounds to leave early.

How do the fees work?

Early termination fees are calculated by working out how long you have left on your contact then billing you for the remaining months.

With broadband, you are generally liable for the full monthly payments to the end of the contract, less things like VAT and discounts. Needless to say, this can result in huge charges if you’re leaving the contract shortly after it’s begun. You’ll usually have to give 30 days’ notice too.

Mobile phone contracts operate on the same principle. With most providers, you’ll need to pay a monthly charge too, though this will depend on the tariff you’re on and will vary quite a bit.

Five tips to get out of your mobile phone contract for free

The best way to get out of a contract without paying a fee is to demonstrate that you aren’t getting the service that you paid for. With broadband, that relates to speed and connection. With mobile phones, reception tends to be the main problem.

Mobile phone signals

Mobile phone signal strength can be monitored through a variety of independent apps and websites. But play the game the firm’s way first. Contact the business and make a complaint about intermittent or consistently poor service. Ask them to test the line to your home – or wherever you use the phone the most. They may ask you to take regular checks over a set period of time.

In the meantime, do your own research. There are other ways to check signal strength and availability. Ofcom have a mobile phone availability checker so you can see if there is a problem with your postcode.

Your phone settings will also monitor signal, so check the options in the ‘settings’ function. You can also download a range of signal checkers – free apps or websites you can use and take screenshots to prove poor service. These can help you identify if the problem is temporary (weather related, for example) or ongoing.

A good service can turn bad for a number of reasons. A local mast might be defunct or out of order, for example, or the firm is ‘piggybacking’ on the back of a new service provider’s technology. Ofcom says you should be treated ‘fairly and sympathetically’ if you have a dispute, so if the firm can’t solve the problem you should be able to leave without penalty.

Turn detective with your broadband

The same principles apply to broadband contracts. I hear so many complaints about questionable service from broadband service providers and many people tell me they put up with substandard service because of a perception that broadband providers are ‘all the same’ and there’s no point moving.

While it’s true that there’s not much variety in the underlying substructure of broadband services, there’s a notable variance in the way businesses operate. Before you jump ship though, I’d speak to your neighbours to see what services they use and what is working (and what isn’t). I happen to live at the end of a very long corridor and the very end of an old building, so I’m ‘furthest from source’ when it comes to the infrastructure that provides my broadband service. If you are in a similar position, then you might want to ask a potential future service provider to send out an engineer first to check if the service will meet expectations. Boosters are available too, though sometimes you have to pay extra each month.

As with mobile phone contracts, there are a range of ways you can check if your broadband service is as promised. Firstly check your account to see what you were promised. Then download a few of the free speed checker apps and take regular screenshots at different times. If you have a flaky service, keep a pad by the router so you can write down when the service goes down and how long for.

According to Ofcom, the Advertising Standards Authority (ASA) sets rules about how companies advertise broadband speeds. They must show the average speed that at least 50% of their customers on the same deal receive at the network’s busiest time (8-10pm). If you aren’t getting the speeds you were promised, you can argue that the contract isn’t being met.

Because lots of things can affect your signal , including your fish tank (I am assured by some firms that a tank blocking a router can ‘sometimes’ have a minor impact – but rarely a big one), broadband firms can be very resistant about letting you bail on your contract early. After all, those exit fees are good for business.

You’ll need to turn detective to counter this. So speak to the firm and follow their instructions for dealing with poor service. You’ll need to have an engineer out a couple of times and keep regular records of poor service. Once you’ve done all of this, you can demand to leave the service for ‘breach of contract’. If they refuse to let you leave for free, then threaten to go to one of the two free Ombudsman Services.

Change of circumstances

Sometimes, life gets in the way. You might suddenly get a job abroad, leaving your UK phone plan unnecessary. You could move to a part of the country that doesn’t offer a broadband service. Or you could simply get married and end up sharing a service when you move in (obvious top tip – never share a phone with your partner!)

Now I would expect all businesses to be reasonable when it comes to a significant change of circumstances that makes the original contract obsolete. However, many, many times, they don’t play ball. I’ve seen businesses insisting on people paying exit fees of over £250 despite broadband not servicing their new homes, or firms arguing the toss over minor mobile phone early termination fees. I’ve even heard from a reader who was billed for not returning a broadband router to the business… when in hospital.

This is all deeply unfair. So pushback and fight for your rights. The more people that complaint the more businesses will have to change their practices. While mobile and broadband contracts do have clauses about ‘change of circumstances’ in the small print, these are often vague, ambiguous or unfair. So don’t be afraid to point this out.

Mis-sales

Mis-selling is an area of complaint that is often used in other areas to highlight unfair contracts, most notably financial services like banking and insurance. It tends not to be cited too often with mobile and broadband complaints.

However, contracts are often oversold or misleadingly advertised and the hidden costs and caveats are downplayed. If you’ve spoken to a mobile or broadband company lately, then you’ll probably have experienced the hard sell. Businesses can offer you lots of discounts online or on the phone, but don’t be afraid to ask for them to confirm their proposals in writing. If you are told that your phone signal will be just fine where you live, or your broadband minimum speed will be consistent and it isn’t, then you have a case for mis-selling.

As a general rule, businesses are expected to keep records of sales calls, just in case a dispute arises). But sometimes these aren’t always available. So note down what they told you, just in case, including the date you signed up.

Customer service

Finally, it’s not always about the actual service you recive. Terrible customer service can be a good reason for ditching a contract without penalty. If you’ve made a number of complaints that have not been resolved satisfactorily, then demand to break the contract without an exit fee.

In recent years, I’ve heard from lots of readers who have told me that they are struggling to even register a complaint with the business. This is a regulatory obligation – and businesses failing to register a dispute should face fines from Ofcom. You are entitled to a written response from your broadband provider if you make a formal complaint (whenever you say the word ‘complaint’ on the phone, in writing or arguably on social media) within 8 weeks. If this isn’t provided, you can automatically go to the Ombudsman.

Over to you

Businesses are making it hard to scrutinise their contracts. So I need your help.

What does your contract say about exit fees and breaking a contract? Have you encountered an unfair T&C or rubbish complaint response. We need to hear from you so we can see if the industry is doing what it should be doing.

Featured in Times Money Mentor – Martyn James

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