Watchdog slams O2 over unexpected price rise

Watchdog slams O2 over unexpected price rise

O2 said it has not gone against the regulation and that Ofcom's rules "do not prevent companies from increasing annual price changes – for example, to invest in improving networks".

In January, new rules were brought in to stop phone and broadband companies raising prices in the middle of a contract without warning.

Ofcom said it was "disappointed" with the firm, and said it was going against "the spirit of our rules" around being transparent to customers about price rises.

The UK's media regulator has criticised O2 for raising its prices by more than it promised customers when they took out their phone contracts.

The company said it spends £700m a year on improving infrastructure and customers can leave their contracts without a penalty.

But consumer expert Martin Lewis said he was "up in arms" over the move, which was "making a mockery of Ofcom".

He said on The Martin Lewis Podcast he believed this would lead to other companies following suit.

"O2 customers' prices are going up - but likely it means the door is open for all of us to now see prices by more than we were told when we signed up," he said.

O2 told its customers they had 30 days to leave their contracts without any termination charges - though if their plan included a handset, they would still have to pay that off in full.

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