The Fixer: Mobile price hike shock

The Fixer logoHave you been left out of pocket due to poor service or sharp practice? Do you have a money problem that won't go away?

It can seem impossible to get a fair result when you are battling a large, faceless organisation alone. But never fear! The AOL Money Fixer is here to help.

This week, she answers a disgruntled Three customer's questions and explains how he can avoid being caught out by price hikes in the future.

Dear Fixer,
About six months ago, I signed up to a 24-month contract with mobile network Three, agreeing to pay a certain amount each month for that term.

Now, however, Three has decided to increase it's prices. And I have been informed that my monthly bills are rising by about £3 as a result.

It is not a huge amount extra. However, the principle of the move annoys me as I think it is normal to expect prices to stay the same when you sign up to a particular tariff - and you cannot get out of your contract early without paying a big fine.

It feels like Three can do what it wants, but I am bound by the terms of the deal I agreed to earlier this year. How unfair is that?

Does Three really have the right to inflict price hikes of this kind on its existing customers? And if so, what is to stop it increasing them again before my two year contract comes to an end?

M Morrison, Guildford

Dear Mr Morrison,

Mobile phone companies are allowed to increase their contract prices by as much as the rise in the RPI (Retail Price Index) each year.

Three is therefore within its rights to increase its "pay monthly" prices by 3.6% - a move that is being blamed on rising business costs - but cannot raise prices again before next year.

The higher Three prices will affect those on 12, 18 and 24-month contracts, as well as new customers.

You are not the only one who failed to recognise that such moves - which are mentioned in the terms and conditions of your contract - were a risk, though.

Figures from consumer champion Which? indicate that at least seven in 10 people on "pay monthly" mobile contracts are unaware that phone companies can raise the amount they pay within the contract term.

In terms of action you can take, you are right that switching away from Three now will mean paying a hefty penalty.

Nor can you switch on to a cheaper tariff, although you may find that you can save by moving to a more expensive tariff if you regularly pay extra charges on top of your monthly bill.

However, you can avoid being caught out in future by going for a Sim-only deal - rather than a "pay monthly" contract - that requires just one month's notice to terminate.

The Fixer

Whatever your financial problem, write to and The AOL Money Fixer will get on the case.
Read Full Story