Martin Lewis warns over broadband bills price rise trap

Speaking on BBC Radio 4 ahead of a House of Commons Public Accounts Committee hearing, the Money Saving Expert founder said customers should know exactly what they’ll pay when they sign a contract.

“I’d love to see all price hikes banned during fixed contracts,” Lewis said. “But I accept that companies argue their costs can change. A fair compromise is simple: don’t allow prices to rise by more than inflation during the contract.”

Lewis believes such a rule would leave “99 per cent of consumers better off” while still allowing firms some flexibility if costs increase.

The consumer champion was particularly critical of broadband contracts, where two-year deals have become the norm.

“If you’re signing up for 24 months, you now have to factor in two separate price rises just to work out what the contract will really cost,” he said.

He also warned that the cheapest deals are rarely available directly from providers.

“The biggest savings usually come through comparison sites because they include marketing incentives like gift cards or cashback that aren’t available if you go direct.”

Lewis said one of the biggest flaws in the current system is that providers can still increase prices after customers have signed a contract.

Although firms must tell customers in advance, he argued the rules don’t work in practice.

“Most people don’t react when they receive a notification email. They react when they see the higher bill land. By then, the 30-day window to leave penalty-free has often expired.”

He wants customers to be given two opportunities to cancel without paying exit fees: once after notification of a price rise, and again after the increased bill arrives.

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Lewis also criticised Ofcom’s current pricing rules, saying they had failed to deliver for consumers.

“Seventy-five per cent of people are paying more under the new system than they did under the old one,” he said, citing MoneySavingExpert analysis of 45,000 broadband and mobile tariffs.

“Almost everyone is seeing above-inflation increases during their contract. That’s simply not fair.”

An Ofcom spokesperson said the regulator shared Lewis’s aim of ensuring consumers receive telecoms services “at a fair price”.

The regulator said its rules were designed to give customers “complete clarity upfront” about the prices they would pay throughout their contract and confirmed it will carry out an in-depth review of the pricing transparency rules, with findings due to be published next year.