Martin Lewis issues broadband ‘rip off’ warning as millions overpay

founder has warned about mid-contract price hikes for mobile and broadband deals.

New rules introduced by the regulator mean providers can still raise prices mid-contract, but they now have two options.

The first option allows providers to withhold the exact amount prices will rise each April, but they must give customers the choice to leave penalty-free within 30 days of the increase.

The second option requires providers to clearly state in pounds and pence how much prices will rise each April when signing up. Previously, providers based increases on future inflation rates, leaving many customers uncertain about potential costs.

However, while the rule change has been praised for its “transparency,” it could result in some households footing a much larger bill than they previously would have under the old rules.

In a on social media platform X, Mr Lewis wrote: “Finally, there’s a ban on firms hiking and bills mid-contract linked to inflation. Yet the way they’ve done it means some winners and some losers.

“Yes, the 17% mid-contract inflation-linked rises are now banned. Good for transparency, however, in practice, some will now face even bigger ones.”

He added: “Millions are being ripped off by overpaying on mobile and broadband.”

In a video shared alongside his post, the guru explained the new rules on mid-contract price increases using an example. He said: “Virgin Media had a deal the other day on broadband – around £25 a month.

“Then it says in April, you will pay £3.50 a month more. And the following April, because it was a contract that lasted over two Aprils, you’ll pay another £3.50 a month more. So £25 will go up to £28.50, and £28.50 will go to £32 a month by the time your contract finishes.”

“That’s the new way they’re going to communicate, and they’re allowed to do it. My problem with this is, while I think this is good for transparency and at least you’ll understand what you’re paying, I wanted to see them ban any mid-contract price rises that are above inflation. But that isn’t happening.

“In fact, for some people, the percentage rise will be far greater than it was with . Think about it: if you’re increasing everybody’s contract no matter what they’re paying by £3.50, someone paying £20 a month will see a massive rise – 16%, 17%. Somebody paying £40 a month, they’re seeing a rise of 8% or 9%.

“So we’re going to see some shifting of the pricing mechanisms that go on here. And what it also allows firms to do, this new model that Ofcom has come up with is it allows firms to price low early on – for a low headline price – but then bump up higher prices year by year.”

He added: “Let’s make this extreme – no one’s doing this at the moment – you could start at £20, but then in a few months time in April, it’s going up to £30. In the year after, it’s going up to £40. That could legitimately work within the rules.”

Mr Lewis then clarified that the new rules only apply to new contracts.

However, once your current contract ends, even if you roll it over, it will count as a new one.

Signing off the video, Mr Lewis urged people to check if they’re out of contract on their mobile or broadband deals, which could mean they’re paying too much.

He said: “14 million people are out of contract on their mobile phones. Text ‘INFO’ to 85075, and that’ll tell you whether you’re out of contract in most cases but not in every case. It can’t work in every system.”

He added: “Go and make sure you’re not being ripped off on your broadband and mobile.”