Money back for broadband and landline customers when things go wrong
- Automatic compensation from 1 April to ensure fairness for customers
- Firms set to pay out £142m unless they improve their service
Broadband and landline customers will get money back from their providers when things go wrong, without having to fight for it, from Monday (1 April).
Previously, only around one in seven broadband or landline customers who suffer delayed repairs, installations or missed engineer appointments have received compensation from their provider; and even then, only in small amounts.
So Ofcom has intervened to ensure fairness for customers, while giving companies a strong incentive to avoid delays occurring in the first place.
The UK’s largest broadband and landline providers have agreed to compensate customers when they experience these delays, without having to ask.
BT, Sky, TalkTalk, Virgin Media and Zen Internet had already signed up to the scheme. Ofcom has today announced that Hyperoptic and Vodafone have also agreed to the new terms, and will start paying compensation automatically later this year. Together, the firms that have committed account for more than 95% of broadband and landline customers in the UK.
The new scheme could see customers benefit from £142m in payments – around nine times the amount they receive today. As well as consumers, it will benefit the many small and medium-sized enterprises (SMEs) who choose residential landline and broadband services.
This is how it works:
Sharon White, Ofcom Chief Executive, said: “We think it’s unacceptable that people should be kept waiting for a new line, or a fault to be fixed.
“These new protections mean phone and broadband firms will want to avoid problems occurring in the first place. But if they fall short, customers must be treated fairly and given money back, without having to ask for it.
“We welcome the companies’ commitment to this scheme, which acts as a strong incentive to improve service for customers.”
Ofcom will carefully monitor companies’ compliance with the compensation scheme, and report on how it is working next year. If customers are not being treated fairly, we will step in and take action.
Fairness for customers
The compensation scheme is part of Ofcom’s Fairness for Customers programme of work to ensure that broadband, phone and TV customers are treated fairly.
- A price cap on directory enquiry services, which also comes into force on Monday (1 April). The cap will protect people who call these 118 numbers from high prices.
- Clear, honest information for broadband shoppers – before they commit to a contract – about what speeds they will get.
- Plans to make companies tell people when their contracts are coming to an end, and what their best available deals are;
- A review of broadband companies’ pricing practices, examining why some people pay more than others;
- A review of how mobile operators charge for handsets when these are bundled with airtime; and
- Easier switching for mobile customers, which comes into effect by 1 July.
NOTES TO EDITORS
1. Ofcom figures suggest there are 7.2m cases each year where broadband or landline customers suffer delayed repairs, installations or missed appointments. Financial compensation, totalling around £16m, is currently paid out in 1.1m of these cases. We estimate people receive an average of £3.69 per day for loss of service, and £2.39 per day for delayed installations.
2. If a customer loses service from 1 April, they will simply have to report the fault to their provider. They do not then need to ask for compensation, as providers will start paying out automatically if the repair takes too long.
3. EE has agreed to the new terms and expects to be able to start paying compensation automatically next year. Plusnet has also committed to the scheme.
4. The new automatic compensation scheme applies to residential fixed broadband and landline telephone services. Around a third of SMEs take a residential package. Our analysis indicates that the number of mobile customers likely to lose service for more than 24 hours is low, and mobile customers generally receive more compensation than broadband and landline customers.