This morning every Orange Pay Monthly customer received a short SMS text message explaining how customers would see an increase in their pay monthly bill as of January 2012 by almost 5%. As of 2010, there were 7,124 million Orange pay monthly customers. As well as increasing rates for new customers, Orange have decided to pass on the increase to all customers who started a new contract with Orange before September this year – even those mid-way through contracts, meaning that some will have to pay up to £3 extra per month. This difference is sizeable when considered over a 24 month period – and as one would imagine many customers are reacting on social media and in discussion forums with many threatening to leave Orange – whilst MobileToday reported that customers are currently ‘besieging’ their customer service call centres.
Orange has faced a significant backlash on Twitter, with some customers going as far as saying they’ll leave the operator. One Twitter user said “The Orange price increase is out of order. I will #saynotoorange at renewal.” whilst Andy Barber said that “…it increasingly seems that the only people bound by contracts these days are customers. Suppliers do WTF they like”. Others took similar issue with the fact that they had, terms and conditions aside, signed up for a contract on the basis that it’s at a certain set price. Jane Glossop tweeted ’I am disgusted with Orange increasing their prices when a contract is in place should not be allowed’ and Elton McManus took things further, tweeting ‘Turns out @Orange are upping their prices because of inflation. Up yours Orange! I guess you think I’m made of money. I shall be moving.’. Similar tweets were seen across the board – Tweets from Paul Rowell, Alex Panayl, Glenn Blair and Lynne Shirley were representative of the sentiments of hundreds this morning – with many leaving at the earliest opportunity.
It appears that not all pay monthly customers have received the text just yet – possibly a form of ‘damage limitation’ to avoid bad PR and a negative backlash all at once.
Orange claim that the legal position is that ‘…Pay Monthly terms and conditions allow us to increase charges by up to the RPI figure in any 12 month period. The increase in the price plan charges is less than the 5.4% rate of inflation as measured by the Retail Price Index (RPI) in October 2011.’, and they insist that ‘this clause has been in place for 10 years though this is the first time it has been invoked.’.
In section 4.3 of the contract Orange states that although you’re able to terminate if Orange makes certain changes the terms of your contract, you’ll be unable to do so if it puts prices up at a rate lower than the RPI measure of inflation, as Kimberly Harwood discovered - ‘Can’t cancel my contract as the rise is ‘within their terms and conditions’ disgraceful! Won’t be renewing.’
One could raise issue that using ‘inflation’ as a reason to justify the increase holds very little weight, especially since the Retail Price Index (RPI) is an indication of rises in consumer prices. Orange are not going to be heavily affected at all by rises in consumer goods – in fact they can only benefit from it. Some commenters on ThisIsMoney.co.uk are holding this as ‘just another example of big business willing to use the economic climate to justify higher pricing’. Another commenter on BitterWallet put it very well – and raised the issue that what Orange is doing is incredibly hypocritical. Commenter Tim wrote ‘Due to inflation, my money no longer buys as much as it used to. Therefore, I’m reducing your payments by 4%. Thanks for understanding.’
There is also speculation that the price rise could be in breach of OFCOM rules. In a statement, OFCOM told us that Customers ‘are only allowed to cancel their contract if the changes cause ‘material detriment’.’, continuing to say that ‘Ofcom is unable to say whether this price rise would constitute a “material detriment” in this case. If there is seen to be a “materiel detriment”, then there must be a free opt-out option enabling customers to cancel their contracts with immediate effect. However consumers are free to challenge the matter through the provider’s complaint process and, failing that, via Alternative Dispute Resolution.’ This comes conveniently after OFCOM released customer satisfaction figures showing Orange and rival O2 at the top – time will tell if these increases across-the-board will impact these. A lawyer speaking to UK consumer magazine ‘Which’ stated that ‘Ultimately, the success of any such challenge against Orange would depend on whether the increase was considered to be significant or not.’
It should also be noted that back in 2009, Orange was forced to make an embarrasing u-turn on another price hike after it faced a barrage of complaints from customers who had been told they could not cancel their contracts in response to the rises.
Customers can contact Orange by contacting customer services by calling 150 from your mobile, emailing [email protected] or writing to them at Orange Customer Services, PO Box 10, Patchway, Bristol, BS32 4BQ.
Orange blame the increase on the fact that ‘inflation is at a 20 year high’ but this seems like a strange reason for many. Others on Twitter are putting it down to corporate greed. This comes as parent company Everything Everywhere reported 1,200 job losses last year, and a tumble in profits by 18.5%. The very fact that this has been invoked for the first time in 10 years is perhaps indicative that Orange are seeking desperate measures to increase profits.
If you’re a pay monthly customer – will you be moving away? Will you be migrating to Three, O2 or Vodafone? What do are your opinions about Orange now? How much more will you have to pay every month as a result of these increases?