Which? finds loyal broadband customers pay too much, suffer bad service

Broadband, Gadgets

Broadband customers who do not switch are enduring “often terrible” customer service and potentially paying hundreds of pounds a year more than they need to with providers taking advantage of their loyalty, according to a consumer watchdog.

Which? found that 71% of broadband customers have been with their provider for at least three years and are likely to be outside of their minimum contract period, which could leave them paying an average of 15% and up to 89% more than a new customer.

TalkTalk had the most loyal customers of the 12 major providers surveyed, with nearly nine in 10 (85%) staying with the supplier for more than three years.

But the provider also received a customer score of just 48% in the watchdog’s latest broadband satisfaction survey and has been the most complained-about broadband supplier now for a while, according to Ofcom figures.

Which? found that the average increase between the price of a TalkTalk introductory offer and the standard cost of broadband after the offer is more than 15%, while its Faster Fibre Speed Boost deal rose in price by 54% after the 18-month contract period ends – an increase of £162 a year.

Eight in 10 BT customers (80%) had also stayed with their provider for at least three years despite the provider coming close to the bottom of the table in Which?’s customer satisfaction survey with a score of 49%. Which? found that the average standard BT tariff is 23% higher than the price of its average introductory deal.

Sky received the lowest customer satisfaction score for its broadband at 47% despite 60% of customers staying loyal for more than three years.

Sky customers face an average increase of 42% when moving on to a standard tariff once their introductory offer has ended but could face as much as a 50% rise on its Unlimited Broadband package, or £120 more a year.

Some 79% of Virgin Media customers told Which? they had been with the supplier for at least three years, but they pay 52% more on average when they move on to a standard tariff and up to 74% – or an extra £240 a year – after the first 12 months on its Vivid 100 fibre deal, the consumer group found.

The biggest one-off price increase was from the Post Office, whose Unlimited Broadband package increased from £15.90 to £30 a month – an increase of £169 more a year – after the 12-month contract period.

Ofcom has proposed new rules requiring providers to notify customers when the minimum period of their phone, broadband or pay TV contract is coming to an end.

Says Alex Neill, Which? managing director of home services: 

“Broadband customers will be outraged to discover that their reward for loyalty is often a substantial price hike, with no improvement to the often terrible quality of service they are getting.

“Suppliers should fight hard for your loyalty, not take it for granted. No-one should be putting up with an internet service that they are not happy with.

“Anyone who thinks they might be out of contract should look to switch to a better deal – a few minutes of your time could potentially save you hundreds of pounds a year.”

Which? surveyed more than 7,000 broadband customers about their opinions on 12 of the biggest internet providers.

Says Minister for Digital Margot James:

“It is not right for customers to be penalised for being loyal. We’ve strengthened Ofcom’s powers to protect consumers and they are taking action by proposing that providers make it clearer to customers when they can switch to a better deal.”

A TalkTalk spokeswoman adds:

“We already give notice before and after contracts come to an end as well as encourage customers to sign up to another deal that provides a guarantee of no mid-contract broadband price increase. While we recognise that some customers enjoy the flexibility of being able to leave at any time, we reward loyalty by giving great deals to those who commit to staying with us.”

Says a BT spokesman:
“We fully agree that customers shouldn’t overpay for the service they receive, and we believe that this is best achieved through clear communications with consumers about their options. We’re working harder than ever to be even clearer with our customers about their options, for example when new customers can benefit from promotional offers and we make it very clear what the price will be when this period ends.”

Concludes Ernest Doku, broadband and mobile expert at uSwitch.com:

“For too long, customers have faced substantial hikes in their monthly bills for staying on with their long-standing broadband provider when their contract comes to an end. And as it is not in the best interests of providers to highlight this, it can often be difficult to find out exactly when a broadband contract comes to an end.

“Ofcom’s proposed introduction of mandatory end-of-contract notifications – where customers will be informed ahead of their existing contract ending – is a step in the right direction. This will help ensure consumers are informed that their contract is about to expire and that they may be able to save money by shopping around.

“Another significant problem is those consumers who have been allowed to fall out of contract without being informed, and therefore unknowingly pay inflated prices. In some cases this is as much as 82%, or almost £250 a year, more than they had been paying prior to their deal ending.

“For many consumers this is a catch-22 situation, and the vast majority are frustrated by the absence of a notification letter, given it is standard practice in other consumer sectors like energy or insurance.

“In a welcome move, Ofcom is seeking to address this issue with a proposed one-off notification for the third of broadband customers who are currently out of contract – in many cases, for more than 12 months already.

“However, this may not go far enough, and if large numbers of households continue to languish out of contract, it may be worth revisiting the out of contract remedy again, in the future.”

Chris Price
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