Mobile phone stores misleading customers over price increases

15 August 2012

The vast majority of mobile phone stores are misleading customers about the possibility of price increases on so-called fixed contracts, according to a watchdog.

A mystery shopping investigation by Which? last month found that 82% of staff in the stores it visited gave incorrect information about "fixed" deals, even when asked directly if the price would stay the same for the duration of the contract.

The group visited 39 stores for O2, Orange, Three, T-Mobile, Vodafone, Phones4U and Carphone Warehouse in the Midlands, North West, South, North East and the South East.

All shop assistants, when prompted, claimed that the number of inclusive minutes, texts and data would stay the same throughout the contract.

However the consumer group said that in the past year four of the five main phone operators - Vodafone, Orange, T-Mobile and Three - had taken advantage of a "hidden clause" allowing them to increase prices on contracts that appeared to be fixed.

Recent Which? research found that 70% of people on fixed contracts did not know that mobile phone companies could increase prices during the length of their contract.

The watchdog, which recently launched the "Fixed Means Fixed" campaign calling on companies to ensure prices and all other aspects of the deal remain unchanged for the full length of the contract, said the practice is potentially netting the industry up to £90 million a year.

It is calling on operators to advertise the possibility of price rises upfront and allow customers to switch contracts without penalty if they do increase.

It has also complained to the regulator Ofcom.

Which? executive director Richard Lloyd said: "It's totally unacceptable that people aren't being told the full story about potential price rises when signing up to contracts in mobile phone shops.

"Shockingly, even when we asked directly about price increases, the vast majority of staff denied this could happen.