Orange phone customers face New Year bill hike

Orange has blamed '20-year high inflation' for raising its monthly mobile phone plan prices by 4.34%. So what can affected customers do?

I’ve been an Orange customer for all of my mobile phone history - over a decade now – but a text I received last week made me want to rethink my loyalty.

‘Hi from Orange,’ it cheerily began, ‘we’re increasing the price of your monthly plan by 4.34% from 8 January 2012.’

Not such a cheery ending.

My thoughts initially raced to contract law. It’s a binding contract, I thought. They can’t just change the terms and increase a fixed rate contract. Surely that’s unfair, if not illegal?

However, as always, the devil’s in the detail.

The small print

The current economic climate has allowed Orange to take advantage of a term in its terms and conditions which has been in place, but never invoked, for 10 years. It allows the firm to increase its charges by as much as the Retail Prices Index (RPI) inflation figure in any 12 month period (outlined in clauses 4.3 and 15.1).

On its question and answer page, Orange points out that its increase is actually less than the latest rate of inflation measured in October 2011, which was 5.4%. So it could be worse!

If you are a customer who signed onto a monthly price plan before mid-September, this hike will affect you. If you joined after that date, your tariff will already have taken the rise into account.

To put the increase into context, a £30 price plan will go up to £31.28. That may not appear a huge amount on a monthly basis, but taken over the life of a 24-month contract, this adds up to an additional £30.72.

Why can’t I cancel?

Although clause 4.3 states that you can terminate your contract if Orange makes certain changes to the terms of your contract, it also says you are unable to cancel if Orange puts prices up at a rate lower than the RPI measure.

However, according to Ofcom, customers are allowed to get out of their contract if the changes cause ‘material detriment’. Unfortunately, this is where things get a bit woolly.

The industry regulator is unwilling to confirm whether the price rise constitutes a ‘material detriment’, but does suggest complaining to Orange as a first step.

It is more likely than not that your request to exit your contract penalty-free will be rejected. But don’t give up; if enough people contact Ofcom to complain, it will then investigate.

Another body which may be able to help you is CISAS, a free independent dispute resolution scheme.

It’s not fair

In addition to the nebulous ‘material detriment’ argument, it’s worth being aware of The Unfair Terms in Consumer Contracts Regulations 1999.

A court can strike certain terms out of a contract if they are deemed to be unfair. One indication of being unfair is if prices are increased without the corresponding right to cancel if the final price is too high compared to the price originally agreed.

This line of argument requires a complaint to Consumer Direct on 08454 04 05 06.

Get yourself a better deal

Of course, there is no guarantee of success with complaining so the less combative option is to wait for your renewal or upgrade date and negotiate. No provider wants to lose customers and this is where you have some bargaining power to get a better deal or take your business elsewhere.

For example, while Orange is currently offering the HTC Wildfire S on a monthly tariff of £20.50 (with unlimited texts and 300 anytime minutes), you can get the same handset with T-Mobile for £12.82 per month (though you'll only get 100 free texts and 100 minutes). If you’re after more included minutes, 3 Mobile has an offer on this phone for £20.00 per month (500 minutes and 5,000 texts included) or you can get a refurbished handset with this provider for £15.00 per month.

For the Samsung Galaxy S II, Orange’s charge of £31 (with unlimited texts and 600 minutes) is quite competitive but this handset is available slightly cheaper with 3 Mobile at £30 (500 minutes and 5,000 texts. Although you have to buy the handset for £50 with Tesco Mobile, paying £25 per month is still the most economical deal over 24 months.  With Tesco, you get 750 minutes and 5,000 texts each month.

Orange and Vodafone both offer the BlackBerry Curve 9300 for £20.50 per month (and you get an extra 100 minutes free with the Vodafone deal), but if you don’t need so many minutes, switch to O2 and your bill will be slashed to £13.50.

Finally the super swish iPhone 4S. This is around the £35 mark with several providers but whereas the handset will set you back £99 with Orange, Vodafone and T-Mobile, you can purchase it for only £49 with 3 Mobile (and you'll get 500 minutes and 5,000 texts).

What do you think? Have you complained with any success? Will you stay with Orange when your contract comes up for renewal? Let us know in the comment box below.

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