The mobile phone contract trap dismantled

Twenty million are on fixed term contracts for mobile phones lasting up to two years. But most of them have been hit by price rises after they have signed, it has added hundreds of millions to their bills. And the problem is that they are tied in - unable to leave without penalties. Today the phone watchdog Ofcom said things will change.

Campaigners at consumer group which have tracked rises from all five major mobile companies (Vodafone, Orange, T-Mobile, Three, O2) and estimate that more than 15 million customers have had to pay a total of £123m extra as a result. In future, starting in three months, customers will be free of being caught between rising charges and penalties.

But some warning notes on this: firstly if you do walk away you will often have to surrender your handset - this varies on the detail of your contract. Secondly, phone companies may counteract this by simply increasing the initial cost of a contract. But the UK is in hopeless love with its mobiles, which means we do have a very competitive market and therefore there should be good deals for those who shop around.