Tesco Mobile's fixed price promise

Tesco Mobile announces a price promise today to fix customers' monthly tariffs at the same rate for the duration of their contract.

In announcing the move, Tesco accuses its competitors of raking in £217m of consumers money through sneaky price rises during their mobile phone contracts.%VIRTUAL-SkimlinksPromo%

So you sign up to a mobile phone contract, agreeing to pay, say £30 a month for 18 months, and that's what happens, right?

Well no, that's not the case as mobile phone networks often carry our mid-contract price rises, which 70% of consumers are completely unaware off, according to research from Tesco.

Rising bills
Figures from price comparison site, uSwitch.com, show almost half (48%) of mobile phone customers overspend on their bills every month, averaging an extra £100 of the course of a year.

Common reasons include calls to premium rate numbers, roaming charges whilst abroad and text entries to TV voting shows - yet the networks are also to blame due to hiking prices after customers have signed on the dotted line.

"Many consumers have been left feeling misled and out of pocket after signing up to a fixed-term contract, only for the price to go up in the middle of it. Even small increases can be a big burden to cash-strapped consumers," said Adam Kirkby, telecoms expert at uSwitch.com

Fixed prices
With prices rising by a median of 81p a month, Tesco Mobile estimates that in one year alone, UK consumers have spent around £217 million extra on their phone bills.

Now the supermarket phone network, which is powered by competitor O2, is breaking from the pack by committing to never raise its customers tariff prices mid-contract.

Simon Groves, chief marketing officer of Tesco Mobile said: "We believe it's only fair to stick to the contract that we make with our customers, and see no reason to change the core tariff price that a customer has signed up to."

Competitive move
Tesco's decision certainly makes it attractive to customers, who are likely to favour the security of a fixed price deal for the duration of their contract over the risk of potential price rises from other networks.

Earlier this month, EE announced an option for its customers to fix their contract price for a small premium. It also promised to clarify to consumers at the point of sale that the price of regular mobile phone bills can vary over the course of the contract.

Ernest Doku, telecoms expert at uSwitch.com, said: "Following EE's announcement, this move from Tesco arguably goes one step further – by ensuring that customers automatically benefit from no price rises, rather than by opting in and paying a premium.

"By ensuring that all plans have a fixed price for their duration, it brings some much-needed clarity and reassurance."

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Tesco Mobile's fixed price promise

The law states that any goods you buy from a UK retailer should be of satisfactory quality, as described, fit for purpose and last a reasonable amount of time.

This applies even if you buy items in a sale or with a discount voucher. You may have to insist on these rights being respected, though.

Useful phrases to use when you want to show you mean business include, "according to the Sale of Goods Act 1979" and, if it's a service, "according to the Supply of Goods and Services Act 1982".

Some shops will allow you to exchange goods without a receipt, but they can refuse to should they wish.

If the goods are faulty, however, another proof of purchase such as a bank statement should work just as well.

If you attempt to return goods within four weeks of the purchase, your chances of getting a full refund are much higher as you can argue that you have not "accepted" them.

After this point, you can only really expect an exchange, repair or part-refund.

The updated Consumer Credit Act states that card companies are jointly and severally liable for credit card purchases of between £100 and £60,260 (whether or not you paid just a deposit or the whole amount on your card).

Anyone spending between these amounts on their credit card is therefore protected if the retailer or service provider goes bust, their online shopping never arrives or the items in question are faulty or not as described.

Start by writing to the agency asking it to either remove or change the entry that you think is wrong. It will investigate the matter and find out whether you have been the victim of ID theft or a bank's mistake.

Within 28 days from receipt of your letter the agency should tell you how the bank has responded. If the bank agrees to change the entry, they will authorise the agency to update their records. They should also send updates to any other credit reference agencies they use.

You can also contact your lender directly to query a mistake. If the lender agrees to the discrepancy, ask them to confirm this in writing on their letterhead and send a copy to the agency, asking them to update your file.

The FOS settles disputes between financial companies such as banks and consumers.

If a financial organisation rejects a complaint you make about its services, you can therefore escalate that complaint to the FOS - as long as you have given the company in question at least eight weeks to respond.

The FOS will then investigate the case, and could force the company to offer you compensation should it see fit.

Bailiffs are allowed to take some of your belongings to sell on to cover certain debts, including unpaid Council Tax and parking fines.

They can, for example, take so-called luxury items such as TVs or games consoles. However, they cannot take essentials such as fridges or clothes.

What's more, they can only generally enter your home to take your stuff if you leave a door or window open or invite them in.

You are therefore within your rights to refuse them access and to ask for related documents such as proof of their identity. If they try to force their way in, you can also call the police to stop them.

Private sector debt collectors do not have the same powers as bailiffs, whatever they tell you.

They cannot, for example, enter your home and take your possessions in lieu of payment.

In fact, they can only write, phone, or visit your home to talk to you about paying back the debt. As with bailiffs, you can also call the police if you feel physically threatened.

Thanks to the Distance Selling Regulations, you actually have more rights buying online or by phone than on the High Street.

You can, for example, send most goods back within a week, for a full refund (including outward delivery costs), even if there's no fault.

You will usually need to pay for the return delivery, though. The seller must then refund you within 30 days.

We enter into contracts all the time, whether it be to join a gym, switch energy supplier or take out a loan.

In most cases, once you've signed a contract, you are legally bound by it. In some situations, however, you have the right to cancel it within a certain timeframe.

Credit agreements, for example, can be cancelled within 14 days. And online retailers must tell you about your cancellation rights for any contract made up to stand up legally.

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