Martin Lewis urges Rachel Reeves to guard cell phone clients | Politics | News | EUROtoday

Martin Lewis, founding father of MoneySavingExpert.com, has written to Rachel Reeves urging her to cease cell phone firms ripping off clients with sudden value rises. Broadband and paid-for TV suppliers are additionally responsible of mid-contract value hikes, he stated.

It comes after O2 lately introduced as much as 15million cellular clients will see their month-to-month payments rise by 40% greater than it advised them once they signed up. Mr Lewis stated O2’s transfer “makes a mockery” of regulator Ofcom’s new “pounds and pence” shopper safety regime. He warned that these practices threat driving inflationary stress to the financial system, and it might snowball if different telecom suppliers comply with go well with.

In a letter to the Chancellor forward of the Budget on November 26, he stated Ofcom ought to have stricter guidelines.

Mr Lewis stated: “I’m writing to request pressing motion to, on the very least, tighten Ofcom’s present guidelines over unannounced mid-contract value hikes for cellular, broadband and pay-TV suppliers.

“O2 has just announced a route to circumnavigate these consumer protections to raise prices. Without an improvement in protection, it is now possible, or even likely, more firms across all the sectors will follow O2’s new method, which could add up to hundreds of pounds for households, making the cost-of-living crisis worse and fuelling inflation.

“I was one of those who, for many years, had loudly and strongly called and lobbied for a ban on mid-contract above-inflation price hikes. Ofcom’s new rules aimed at controlling these came into force in January this year. The method was not the one I would’ve chosen, but at least it was something. Now, sadly, its flaws have been exposed.”

He explained: “The change meant Ofcom banned contracts that included clauses linking rises to inflation, and instead requires broadband, mobile and pay-TV providers to clearly show how much bills will increase each year in ‘pounds and pence’ – before people sign up. So, consumers would have a right to know the actual price paid throughout the length of the contract term.

“Now O2 has announced that, from April 2026, up to 15million O2 mobile customers will see their monthly airtime bills rise by more than it told them when they signed up (or declared when they wrote new terms to existing customers). It had said it would increase bills by £21.60 a year, yet the actual rise will be 40% more, £30 a year.

“The rises O2 had told customers of in advance were already usually far above inflation. But now they will typically be at an annual rise of at least 7% and up to 30%. The highest increases are for those with cheaper deals – hitting those consumers who have tried to keep costs down the hardest.

“These practices add more inflationary pressure to the economy. And if others follow suit, it could snowball.”

He said O2 had used a loophole in the rules to push up prices higher than expected.

“So how did O2 get away with this, within the rules? By writing to people and telling them that within 30 days of receiving the price notification they can leave penalty free. In reality, this makes a mockery of Ofcom’s new ‘pounds and pence’ consumer protection regime. The whole concept – that ‘people will know what they’d pay’– is now a busted flush.

“O2 knows it carries the power here, it will have done its sums, clearly this ‘you can leave penalty free’ rule is not an effective deterrent.

“While all its impacted mobile customers can leave penalty free – and many should (I will be shouting loud and large for them to do so) – we know only a small minority will. Most will likely just have to suck up a rise that was more than they were told when they signed up. This particularly hits older and more vulnerable people who are less likely to switch.”

And he said that it wasn’t good enough to say people could switch to a different provider because in practice that just wasn’t an option for many customers.

“There are many barriers to stop people ditching and switching, both real and perceived.

“Information overload means many miss out on their rights. Customers who receive contact from firms like this usually just see ‘price rise’ and miss the bit below about their right to leave if they act quickly. If they wait until the price rise hits their bank account, it will be too late for them to leave without any early termination charges. Even a few who’ve watched my information videos on this change, where the issue is front and centre, have replied ‘I will leave O2, I will just have to wait to the end of my contract’.

“Many with separate handset contracts from the same firm tell me they are worried they will have to pay the remaining balance upfront in order to leave.

“Some feel trapped by their signal, not willing to risk moving elsewhere because it’s the only provider that works for them (even though virtual mobile networks offer similar signals).”

Calling for Ofcom to protect customers, he said@ “It’s regrettable that when Ofcom consulted on these changes it didn’t listen to the simpler proposal I and others made to simply ban above-inflation mid-contract price rises (or any mid-contract rises). It is even starting to look like Ofcom’s change has resulted in many customers, especially those on cheaper tariffs, seeing far bigger price rises than they would’ve done on the old mid-contract inflation-linked price rises.

“At a time when the Government is focused on the cost-of-living, household bills and getting inflation down, it is vital that swift action is taken. I look forward to hearing what action the Government and Ofcom will take to protect consumers.”

A statement on O2’s website reads: “From April 2026, the month-to-month value of your cellular plan will probably be growing. We’re letting now so you may plan forward and be ready.

“Each April, your airtime plan will increase by £2.50 for voice plans and 75p for data-only and smartwatch plans.

“We understand price rises are never ideal and want to reassure you this will only affect your airtime plan, with the cost of your device remaining frozen.”

An O2 spokesperson stated: “With demand for mobile data at an all-time high, we’re introducing a 70p per month increase to annual price rises for O2 customers, effective each April.

“An annual rise of £2.50 a month – around 8p a day – continues to represent excellent value for services that customers are using more than ever before.

“We’ve again frozen prices on handset repayment plans and are investing £700m into our mobile network this year to ensure we meet growing demand and give our customers the fast and reliable connectivity they rely on.

“Customers on our social tariffs continue to be exempt from any price changes as part of our efforts to provide support to those who need it most.”