Consumer advice organisation Which? has urged Ofcom to investigate Virgin Media’s impending contract terms that allow it to raise broadband bills by “unlimited sums” from next April
From next April Virgin Media plans to introduce inflation-based price rises that will increase broadband prices each year.
Which? says Virgin Media’s inflation-based annual mid-contract price rises also allow for prices to be increased at any time and it has asked Ofcom to proceed urgently with an investigation into Virgin Media “so that action can be taken to prevent millions of customers from facing unfair inflation-linked mid-contract price increases in April 2024”.
Ofcom could demand that Virgin Media drop its unfair terms or ask a court to declare them unlawful and unenforceable and prohibit further unfair pricing practices. A court could also order Virgin Media to refund money to consumers who signed up for contracts.
“We have raised this with Ofcom as it’s the most egregious example of unacceptable price hiking practice across the broadband industry.
As Which? said: “As well as applying aggressive inflation-linked annual mid-contract price rises, it’s also maintaining the right to hike bills further at any time. That discretionary price rise clause has been part of Virgin Media contracts for some time. But the new terms also allow for annual price rises based on the retail price index rate of inflation plus an additional 3.9 per cent while removing the right for customers to cancel without paying substantial exit fees.
“These clauses amount to unfair contract terms and could be in breach of the Consumer Rights Act by creating a ‘significant imbalance’ between the rights Virgin Media has granted itself and those of its customers,” said Which?.
“Guidance on unfair contract terms from the Competition and Markets Authority states that ‘any purely discretionary right to set or vary a price after the consumer has become bound to pay is obviously objectionable’. This is particularly because these terms can make it impossible for consumers to predict how much they’ll end up paying for broadband services when they sign a contract with Virgin Media”