Manx Telecom breached its licence conditions when it failed to properly inform customers of a recent price increase.

The Communications and Utilities Regulatory Authority has released its preliminary decision following a June price increase for broadband prices.

In its decision summary, CURA said that MT increased its retail broadband prices on June 1 by 10%, with the company saying this was in light of inflation and that prices hadn’t increased for several years.

However, the company was under an obligation to notify customers of any changes in the terms of contracts that would ‘likely result in a material determinant’.

Under the licence agreement, customers had to be given at least 30 days notice.

However, during May, as a result of routine compliance monitoring, CURA said it became concerned that the steps taken by MT to notify its customers of the impending increase ‘were not sufficient to fully discharge its regulatory obligations’.

While preliminary inquiries were taking place, CURA said it received two unsolicited complaints in relation to the notice given to consumers regarding the price increase; one from an MT customer, and one from another operator.

increase

In its summary, CURA said that MT had originally told it that it intended to increase prices on May 1 and would be updating customers on April 1 and made reference to its obligations to inform customers.

The authority added that the launch was delayed until June 1 and that ‘it was clear from the correspondence that Manx Telecom accepted that the price increase would constitute a material detriment to consumers’.

Sample invoices from the time show that while the invoices were dated May 1, they weren’t sent until five or six days later, thereby not complying with the 30-day rules.

CURA added: ‘The notification on the bill provided no details of the price increase, it simply contained a web address to get further information; however, the address given did not bring the customer directly to the notice, it instead brought them to another page which contained a link to the notice, among other things.

‘There was no notice, or link to a notice, on the homepage that a consumer would initially land on when visiting the site on normal business, nor was there any notice posted in the ‘news’ section of the website.’

‘Finally, there was no mention of the pending increases on social media, a channel regularly used to communicate issues to customers.’

Furthermore, CURA also spoke to staff in MT’s store, but it reported that ‘staff were unaware of any pending changes’.

response

In its response, MT pointed out that it had placed notices in shops and online, as well as putting a notification on bills. However, the company also acknowledged that tables detailing the price increases by showing current and new pricing for each product had been omitted due to an admin error.

It proposed that it would replace the existing notices to include the tables that had been omitted and extend the customer’s right to cancel from September 30 to October 31 2022.

As a result of its investigations, CURA said it has ‘ formed the preliminary view that Manx Telecom did not fully discharge its obligations in respect of the recent price increase’ and therefore breached a licence condition ‘as a minimum’.

It added: ‘With regard to the matter at hand the authority is of the view that Manx Telecom took steps designed to show that it had mechanistically met the requirements of its licence, but it did not take any steps to actually inform its consumers.’

As part of the proposed remedies, CURA said it intends to direct MT to provide additional time, as the company proposed, for customers to terminate their contracts, but said that ‘further remedies are also required’.

It further stated that MT should ensure all customers are directly informed of the changes and provide a full refund of all money collected from June 1 until the point where the contract is terminated.