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Why is RPI Increase allowed?

Getafix
16: Advanced member
16: Advanced member

I have just been thinking about this as trying to work out the real reason for this?

So, why do they need to increase the Tariff by RPi?

25 REPLIES 25

beightonguru
6: Helper
6: Helper

"The Retail Price Index (RPI) is one of the two main measures of consumer inflation produced by the United Kingdom's Office for National Statistics. The Retail Price Index (RPI) was introduced in the U.K. in 1947, and was made official in 1956."

jeffkinn
17: Community Champion
17: Community Champion

There are two answers.

 

1. To ensure that their revenue maintains its value over time as the relative buying power of a specific sum of money depreciates.

2. Because they can!

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chistery
16: Advanced member
16: Advanced member

It's a massive scam isn't it. If you sign a contract, that should be the price you pay for the period of that contract, like fixed price energy deals. 

There's also the way it's calculated on the non discounted price, yet when you sign up they rarely mention the list price. The price you pay should be the price that any increase is based on.

BT lawyers argued that CPI was a better value to use because it suited them and would mean paying less into the pension pot, but they are quite happy to use RPI when it means more money for them.

jeffkinn
17: Community Champion
17: Community Champion

No it's not a scam but it is an un welcome practice and something I've never agreed with but the essential fact is that phone contracts have never been fixed orice but minimum price. 

 

Pesonally it never affects nme nuch as I have annual SIMO contracts and have found that over time by costs have gone down but the amount of data I receive has gone up significantly.

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Getafix
16: Advanced member
16: Advanced member

Ok, here to to put the Car among the Pigeons.

 

My tariff has gone up by RPI. However they are still offering the same for upgrades or new customers.

So how can they justify the increase?

jeffkinn
17: Community Champion
17: Community Champion

I'm not sure there is a justification. It just is what it is. Tariffs are changing all of the time and the RPI increase is just a mechanism to increase their revenue. Ofcom did try and get rid of this unwelcome practice but failed as all of the networks added a clause to their T&Cs allowing them to do this. As customers we have agreed and it amazes me that every year around this time it becomes a big story in the press. We all know it happens. We all know it's coming. We have all agreed to it. 

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Getafix
16: Advanced member
16: Advanced member

I understand and agree with the increase.

But not when they continue selling the same Tariff to New Customers.

That for me is if not illegal, but definitely immoral.

The fact that they offer it to New Customers they cannot claim that it is to counteract RPI cost.

 

I agree, while not illegal it is certainly immoral. To my mind a contract should be binding on both side for the duration. 

jeffkinn
17: Community Champion
17: Community Champion
The contract is binding age we have agreed to the increase. What they should be is fixed price. They should also reduce in price after the two years have elapsed. Or buy a phone and get a 12 month sim only contact.

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