Small businesses and consumers will be able to terminate their new landline, broadband or mobile contracts from today if suppliers raise prices mid-contract, Ofcom has ruled.
The UK communications regulator said consumers and SMBs will be allowed to exit a contract without penalty if their provider increases the monthly subscription fee above what was agreed at the time of sale.
Ofcom said that customers should be given at least one months notice if their telecoms provider is going to change its monthly fees.
The legislation states that any changes to contract terms, pricing or otherwise, must also be communicated clearly and transparently.
Ofcom said it would carry out mystery shopper research in the coming months to ensure telecoms providers adhered to its new rules.
"We have reached an important milestone in our work to ensure consumers and small businesses have better protection against unexpected price increases," says Claudio Pollack, Ofcom's consumer group director. "Additionally, our new guide highlights important factors customers might want to consider before entering into a new contract to help them understand exactly what they are signing up to."
Last year Ofcom revealed it had considered a complete ban on mid-contract price rises, but said this would probably be at odds with European laws.
The decision comes in the same week that Ofcom approved satellite broadband for trains, boats and planes.