Virgin Media price rises break the law

[Mr K]

https://www.telegraph.co.uk/money/co...nsumer-advice/

Virgin Media’s price rises ‘break the law’, says Which?

Virgin Media has been accused of unfairly increasing broadband prices for millions of customers in a move that has been condemned as “potentially unlawful”.

The consumer rights group Which? has accused the telecoms company of applying “aggressive” inflation-linked mid-contract price increases while making it difficult for customers to cancel their deal without paying high exit fees.

Ms Concha said: “While other providers use the consumer price index (CPI) to calculate inflation-linked mid-contract price rises, Virgin Media is the only major broadband firm which will use the RPI from next spring.

RPI is currently significantly higher than CPI. It lost its status as a national statistic in 2013 and has been heavily criticised as a measure of inflation.”

Which?’s complaint to Ofcom also highlighted a clause in Virgin Media’s terms and conditions which states that it can “change our charges at any time”, arguing that this could amount to an unfair contract term and be in breach of the Consumer Rights Act.

Virgin Media has rejected the claims, describing them as “baseless” and “a one-sided, selective and misinformed reading of widely used contractual terms”.

However, Rocio Concha of Which? said Virgin Media was “trying to have its cake and eat it” by passing on inflationary price rises to millions of its internet customers.

“Which? believes this is not only unacceptable but potentially unlawful and Ofcom [the telecoms regulator] must investigate urgently,” she said.

Virgin Media strongly rejected the claim that it was potentially breaking the law.

Telecoms companies are facing growing scrutiny over their contracts following sharp increases in both mobile and broadband charges this year. Customers of BT, Vodafone and Three faced a rise of 14.4pc in April.

Virgin Media cable customers faced an average increase of 13.8pc. Mobile and internet firms have defended the large increases, saying they have to cover rising costs and investment in their networks.

Virgin Media will implement an annual price rise next April based on retail price index (RPI) inflation plus 3.9 percentage points.
“We have no plans to increase monthly bills multiple times within the same year. If separate out-of-bundle charges are increased at any point, this would be clearly outlined and customers would receive a right to cancel.

“Our terms and conditions have been drafted in line with standard industry practice, consumer law and Ofcom guidelines.”

Ofcom said it would respond to the issues Which? had raised. The watchdog is already investigating Virgin Media following complaints from customers that the company had made it difficult for them to cancel their services.

Ofcom said some customers were struggling to get through to an agent on the phone, while other calls ended mid-way through or were put on hold for long periods.

A spokesman said: “We already have an enforcement programme open into whether telecoms firms have previously been complying with our rules, which state that mid-contract price rises must be set out clearly before customers sign up.

“We are also reviewing whether inflation-linked, mid-contract price rises give customers sufficient certainty and clarity about what they can expect to pay. We will report on both of these later this year.”

Does Ofcom have any teeth? VM are going to find out....

I’m shocked!

I really can’t believe this.

You read the Telegraph?

[Mr K]

Originally Posted by Hugh

I’m shocked!

I really can’t believe this.

You read the Telegraph?

Every day Hugh, its hilarious, especially readers demented comments

[Peter729]

Ofcom does have teeth, they will tell VM, in a stern voice, they are very naughty boys and not to do it again. ��

Once that’s done it will bring the matter to a close and everything will carry on as before

[denphone]

Originally Posted by Mr K

Every day Hugh, its hilarious, especially readers demented comments

You must have snapped up a years subscription for not much more then a pint and a pie.

[bbxxl]

I have a fixed price contract so never had price increases until I renewed- at least until this year. I’m now on Volt and have to have an O2 SIM which I don’t want and they put their prices up by over 17% this year, when it was Virgin Mobile it was included in my contract price so no in contract rise. The change to O2 really is a con.

[Inactive Digital]

There's a difference between what's legally acceptable and what's morally acceptable.

Vague 'Inflation+' terms in contracts might be a valid term in a contract but, on a moral footing, ultimately leaves customers not knowing how much they will pay over the term of their agreement. As I type this, I have no idea how much per month I will be paying VM come next April in pounds and pence. In my eyes, that's morally wrong (even though I accepted the contract anyway!). But with most major competitors doing similar, there are few alternatives.

[denphone]

Some serious thinking to do early next year when our 18 month contract ends.

[jfman]

I don’t really see what the drama is. The problem is inflation, not that companies put conditions in contracts.

If inflation was actually at the BoE target few would really be griping about £5-6 a month price rises. It’s been fairly run of the mill to have rises in that ballpark for decades for a Sky + Sky premiums + broadband package.

[Mr K]

Originally Posted by jfman

I don’t really see what the drama is. The problem is inflation, not that companies put conditions in contracts.

If inflation was actually at the BoE target few would really be griping about £5-6 a month price rises. It’s been fairly run of the mill to have rises in that ballpark for decades for a Sky + Sky premiums + broadband package.

VM are using RPI, the higher less accurate inflation measure( rather than the more accurate CPI), plus 3.9% for some reason. Are their costs going up higher than inflation? Customers are being asked to sign contracts with no idea what they will pay in future.
Even Mr Turpin wore a mask. Ofcom never caught up with him either....

[Peter729]

Originally Posted by Mr K

VM are using RPI, the higher less accurate inflation measure( rather than the more accurate CPI), plus 3.9% for some reason. Are their costs going up higher than inflation? Customers are being asked to sign contracts with no idea what they will pay in future.
Even Mr Turpin wore a mask. Ofcom never caught up with him either....

To Ofcoms credit they are still looking for Turpin.

[jfman]

Originally Posted by Mr K

VM are using RPI, the higher less accurate inflation measure( rather than the more accurate CPI), plus 3.9% for some reason. Are their costs going up higher than inflation? Customers are being asked to sign contracts with no idea what they will pay in future.
Even Mr Turpin wore a mask. Ofcom never caught up with him either....

RPI is by far the more accurate measure of inflation in the real world as experienced by the population at large.

CPI is selective to provide a lower value by excluding certain things - housing costs for example.

[Mr K]

Originally Posted by jfman

RPI is by far the more accurate measure of inflation in the real world as experienced by the population at large.

CPI is selective to provide a lower value by excluding certain things - housing costs for example.

Look on the ONS site and you will see that it really isn’t mad for the RPI. It lost its status as a national statistic back in 2013 and the latest release on the matter is pretty clear that it is considered “a very poor measure of general inflation at times greatly over estimating and at other times underestimating changes in prices and how these prices are experienced

https://moneyweek.com/merryns-blog/t...-matters-55018

Other providers are using CPI. And where does the plus 3.9% come from? Are they laying thousands of miles of new cable? Or is it to make up for the customers they are shedding? Or is dare I say, corporate greed, and a weak regulator?

[jfman]

Originally Posted by Mr K

https://moneyweek.com/merryns-blog/t...-matters-55018

Other providers are using CPI. And where does the plus 3.9% come from? Are they laying thousands of miles of new cable? Or is it to make up for the customers they are shedding? Or is dare I say, corporate greed, and a weak regulator?

I know the difference between RPI and CPI I don't need a link to tell me.

While I agree the telecoms market is poorly regulated I don't really see what the injustice is in Virgin Media including a clause for a price rise linked to (although above by a fixed rate) inflation. BT pull the exact same 3.9% from thin air.

People in this country are getting poorer because of Government incompetence, not because broadband companies fudge their price rises.

Lest we forget if we regulate them all we will simply pay higher prices sooner since they will all want/need that fixed return.

The Government wants (indeed needs) Virgin Media O2 and Openreach to hit their rollout figures otherwise their own aspirations for full fibre are down the pan.

[Pierre]

Originally Posted by Inactive Digital

There's a difference between what's legally acceptable and what's morally acceptable.

Not on this site, there isn’t.