Martin Lewis urges O2 customers to ‘leave’ as he issues warning to Rachel Reeves | Personal Finance | Finance

Money expert Martin Lewis has called on customers of mobile giant O2 to switch to another network within 30 days in a letter sent to Chancellor Rachel Reeves.

Martin reacted to the news that O2 is hiking its mid-contract price rise to get around Ofcom rules. The network announced it is increasing the amount it will raise prices, from £1.80 to £2.50, for those locked in a contract.

Under new Ofcom rules which came into force in January, mobile and broadband firms have to set out in a ‘pounds and pence’ figure how much your price will rise mid-contract, rather than use a percentage.

But a loophole allows companies to increase the amount by more than they promised up front, as long as customers are able to cancel within 30 days.

Now, Money Saving Expert founder Martin Lewis has written to Chancellor Rachel Reeves calling for a rule change to ban the practice, and says he will be urging O2 customers to switch away from the network.

In an open letter he published via MSE, he wrote: “Without an improvement in protection, it is now possible, or even likely, more firms across all the sectors will follow O2’s new method, which could add up to hundreds of pounds for households, making the cost-of-living crisis worse and fuelling inflation.”

He added: “While all its impacted mobile customers can leave penalty free – and many should (I will be shouting loud and large for them to do so) – we know only a small minority will. Most will likely just have to suck up a rise that was more than they were told when they signed up. This particularly hits older and more vulnerable people who are less likely to switch.”

He then warned Rachel Reeves to fix Ofcom’s ‘busted flush’ rules and simply ban mid-contract price rises altogether, adding: “It is even starting to look like Ofcom’s change has resulted in many customers, especially those on cheaper tariffs, seeing far bigger price rises than they would’ve done on the old mid-contract inflation-linked price rises.

“At a time when the Government is focused on the cost-of-living, household bills and getting inflation down, it is vital that swift action is taken. I look forward to hearing what action the Government and Ofcom will take to protect consumers.”

When Ofcom announced its new rules, Ofcom’s director for networks and communication, Natalie Black had said: “Our new rules mean there will be no nasty surprises, and customers will know how much they will be paying and when, through clear labelling.”

Tom MacInnes, director of policy at Citizens Advice, told the BBC it showed Ofcom’s actions “haven’t gone far enough”.

He said: “The regulator needs to wake up and make these essential markets work for everyone.

“Ofcom needs to go back to the drawing board and bring forward plans to stamp out mid-contract price rises once and for all.”