The mobile phone giant Vodafone has been accused of "blatant dishonesty" after blocking customers from legitimately quitting their contracts over price rises.
Anyone whose bills are likely to increase by more than 10 per cent when the company puts up its charges tomorrow is legally allowed to abandon their contract free of charge. But the network has been telling customers they are still bound to the agreement, and demanding payments of up to £500 for their release.
Millions of people could be trapped wrongly in contracts when charges for some calls go up by as much as 40 per cent. As Britain's second-largest mobile phone company, Vodafone has more than 18 million customers, 7.5 million of whom are on contracts.
Last week Ofcom, the telecommunications watchdog, launched its first full-scale inquiry into mobile charging in the UK, after discovering that more than 1.4 million people are dissatisfied or very dissatisfied with the service they receive.
Vodafone announced earlier this month that its minimum call charges would be going up by 25 per cent. As well as this, calls to 0871 numbers will rise 40 per cent to 35p a minute and 0870 numbers (used by many call centres) will be up 33 per cent to 20p.
But a detail in its terms and conditions should mean that some customers will be able to avoid the soaring costs of their agreement with no penalty. The contract states: "You may end this agreement immediately by writing to us ... if we increase call or other usage charges which have the effect of increasing your call or other usage charges by more than 10 per cent."
But when customers called last week with evidence that their bills would rise by more than 10 per cent they were told they were locked into the contract unless they paid a penalty and the remainder of their line rental – often £500 or more.
Anna Fielder, senior policy adviser at the National Consumer Council (NCC) said: "It is blatant dishonesty. Vodafone has raised bills more than 10 per cent in many cases, but is not being transparent.
"The majority of customers would never read the terms and conditions of their contract, but if customers are being refused when they would have rises of more than 10 per cent then Vodafone is in breach of contract."
Those who inquired about the price increases were also told that the charges were "just a few pennies" and "nothing substantial". But Ms Fielder warned people to examine their bills before resigning themselves to the extra cost.
"If you call a lot of 0870 numbers – which many people do now that more don't have landlines – this will affect you," she said.
Marc Gander of the Consumer Action Group said that Vodafone's behaviour is unacceptable. "Having exceeded its own limits, Vodafone has to allow people to leave," he said.
"There should be an open door to walk out of the contract undisputed, but that's clearly not the case and it's a disgrace."
Vodafone staff who stop users from leaving are also in breach of Ofcom's rules, which state that "companies are obliged to inform the consumer of the ability to terminate the contract without penalty if the proposed modification is not acceptable to the consumer".
Ofcom said that it had already received calls on the issue and would need to look at the specifics of any individual case. A spokeswoman for the communications watchdog warned that mobile companies could be penalised for such practices. "A breach of a general condition could result in a maximum penalty of 10 per cent of relevant turnover," she said. "Any customer who thinks they are affected by the problem should get in touch."
Vodafone maintains that few customers exceed their free minutes but would not say how many the price rise affected. But following inquiries by the IoS it said it would release customers whose bills increase by 10 per cent or more.
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