Martin Lewis has revealed how customers are being ‘ripped off’ by broadband providers despite a change in Ofcom’s rules that should protect them.

The money-saving expert, 52, issued a warning in a video posted to X, formerly Twitter, earlier this week where he explained how internet companies are getting round the rule change.

In the last two weeks, Ofcom finally banned inflation-linked mid contract price hikes which allowed broadband companies to charge their customers more depending on the rate of inflation. 

This meant the amount you paid for your mobile and broadband could still rise in April even when you were signed in to your agreed contract.

Martin explained that last year some were paying eight or nine per cent higher than their originally agreed bill because companies were raising their prices to three or four per cent above inflation.  

But the regulating body Ofcom banned the practice.

Firms must now set out clearly in pounds and pence what the rise in price will be over the course of the contract and when the price rise will occur. 

Previously customers were left in the dark about future price hikes because they were linked to inflation but under the new rules they will know upon signing up.  

But this only applies to new contracts.

Companies can still raise their prices without setting out clearly in the contract by how much and by when, but if they do their customers have the option to leave within 30 days, penalty free. 

While Martin praised the move for its transparency, he also raised concerns for some bill payers. 

He explained that he had advocated for a total ban on mid-contract price rises above inflation but was unsuccessful.

He explained that the new rules may leave some customers more out of pocket than before.

Martin said: ‘Yes, the 17% mid-contract inflation-linked rises are now banned. Good for transparency, however, in practice, some will now face even bigger ones.’ 

‘If you’re increasing everybody’s contract no matter what they’re paying by £3.5, someone who’s paying £20 a month is seeing a massive rise of 16 or 17 per cent.

‘Someone who’s paying £40 a month, they’re seeing a rise of eight or nine per cent.’  

He warned customers to be careful not to fall for low ‘headline prices’ offered at the start of contracts, only to be locked in to paying more later down the line. 

The money-saving guru said: ‘We’re going to see some shifting of the pricing mechanisms that go on here. 

‘And what it also allows firms to do, this new model that Ofcom has come up with is it allows firms to price low early on – for a low headline price – but then bump up higher prices year by year.

He then gave an example, saying: ‘Let’s make this extreme – no one’s doing this at the moment – you could start at £20, but then in a few months time in April, it’s going up to £30. In the year after, it’s going up to £40. That could legitimately work within the rules.’

He added that it was important customers checked any new terms and conditions to make sure they weren’t being ‘ripped off on your broadband and mobile. 

Martin’s update comes after he revealed an easy trick to save £100 on energy bills during his live ITV show on Tuesday.

He explained that energy company EDF has launched a brand new tariff that could save people £100 on their bills.

The new offer is essentially a discount, with EDF offering standing charges that fluctuate with Ofgem’s price cap.

Instead of imposing a fixed fee on customers, it will follow the price cap which is set by the energy regulator and means that prices will be lower when the price cap is lower.

He explained that the changing price won’t affect the price paid for usage, but will affect standing charges, or the fixed daily charge for having access to gas and electricity.

Martin said: ‘It tracks the price cap. Price cap goes up, it goes up. Price cap goes down, it goes down.

But, he added, there is a catch; these savings will only help those who already have lower bills.

Martin said that for those whose bills work out to £135 or less, the saving would be very helpful because the lower cost of the standing charge would be taken off their bill.

Because energy bills are made up of your energy usage as well as the standing charge, those who use less energy will see standing charges make up a higher proportion of their total energy bill. 

This means that the saving will have more of an impact than those who use more energy where the standing charge makes up less of their bill than their usage. 

Martin explained that, for those paying less than £100, the deal could be extremely helpful – adding it would have a ‘massive’ impact on bills that are even lower. 

He said: ‘If you’re paying £80 a month this is massive because most of your bill is standing charges.’

But he did caution families who have higher bills against transferring to EDF because it might not save them as much – with Martin advising them to check out other options on comparison sites.