03/12/2012

Orange £41M better off thanks to raised 'fixed rate' tariffs


Is orange taking the pith picking our pockets?


A year ago today, Orange announced that it was going to put up the prices of its fixed rate phone contracts. Whilst most people thought that they could budget their phone usage, hidden clauses meant that the provider could still increase tariffs and keep the customer tied in. Not on, my old fruit, is it?

At the time, Orange had over three and a half million customers tied into such fixed contracts. The increase of 4.34% stood to nett the company an extra £41M, according Which?, the renowned consumer group.



Orange is not the only bad fruit


In all fairness, Orange was not the only thieving fecking phone provider to implement such daylight robbery. Three Mobile, T-Mobile and Vodaphone have all proved to be equally as untrustworthy.

All in all, it's estimated that the felonous four - at least they will be if Ofcom can prove wrongdoing - stand to gain £104M on the year. Not bad if you can get away with it, especially when you've got your customer by the bollocks in a contract they're obliged to honour.

Bowing to pressure from the consumer group, Ofcom, the regulatory body, conceded last month that the issue warrants investigating. 33,500 mobile customers have signed up to Which?'s 'Fixed Means Fixed' campaign, which offers a sensible solution.

Increase clause morality contradicts current marketing theory


Sticking to their guns, Orange and the other providers could simply turn around and say, 'Well it was in the small print.' Whilst totally immoral, and with today's market emphasis focused on building consumer trust it could be a somewhat antiquated reaction; nevertheless, it would be technically legal.

The proposal Which? is fighting to implement involves adding a clause to counteract the existing one allowing Orange and Co to increase their 'fixed' tariffs It would recommend that if the provider intends to increase a fixed phone contract rate it at least allows the consumer to search for another network provider in the interim.  That way, both bill-payer and provider have an option.  Furry muff.

The move may well come back to bite the network providers on the arse, too. Ofcom has not only decided that phone tariffs need looking into, but also broadband and land-line prices, too. Theoretically, the clause could be implemented across all of those communication platforms.

UK household budgets are stretched to breaking point and unforeseen increases are unwelcome to say the least. With the Chancellor seeking to cut the welfare budget by £8bn, the last thing we need is for Orange to be taking the pith, too...