Broadband companies have called for lower termination fees as prices rise

Broadband companies have been urged to lift penalties for customers leaving their contract mid-contract amid concerns about an impending “exorbitant” price increase or an exit fee of over £200.

Millions of broadband and mobile customers can expect monthly bill increases of at least 14% from April.

Suppliers often link their annual price increases to the January Consumer Price Index (CPI) or Retail Price Index (RPI). Despite easing slightly this month, both are close to 40-year highs with the latest CPI at 10.5% and RPI at 13.4%.

Broadband contracts from BT, EE, Plusnet and Vodafone allow prices to increase by CPI plus 3.9%. On TalkTalk, it’s a CPI plus 3.7%, while Shell Energy can add a CPI plus 3%. Sky and Virgin Media’s contracts allow mid-contract price increases, but they do not define the pricing formula in the same way as rivals.

BT confirmed 14.4% growth this year – CPI 10.5% plus 3.9%.

Which? warned that, given that many customers’ broadband bills rose by almost 10% last year, it was “another blow” for those looking to control rising costs.

Broadband Cabinet BT

BT raises bills by 14.4% (Alamy/PA)

Ofcom’s regulations state that telecoms providers must offer their customers the right to withdraw from their contract without penalty if they are subject to unexpected price increases that are not provided for in their contract.

But as mid-contract price increases are written into some people’s contract terms, Ofcom has a policy that in such cases the customer has no right to cancel without penalty – meaning they have no choice but to accept the new higher price. price or pay a termination fee.

However, the regulations require that the relevant conditions be set out in a visible and transparent place at the point of sale. Ofcom is currently investigating whether contract price increases were made clear enough by telephone and broadband companies before customers signed up.

Which? calls on all suppliers to “carefully assess what level of mid-contract price increases can be justified in the current economic climate”.

Rocio Concha, which one? director of policy and advocacy, said: “It is very worrying that many broadband customers could find themselves in a losing position where they will either have to accept exorbitant – and hard to justify – mid-contract price increases this spring or pay costly exit fee for early termination of the contract and finding a better deal.

Calls on suppliers to let their customers walk away without penalty if they are faced with mid-contract price increases. Suppliers should also carefully consider the level of possible price increases when many consumers are already under huge financial pressure.

Broadband bill

Millions of Broadband Customers to See Price Increases in April (Alamy/PA)

“With so many households struggling to make ends meet, it’s completely unfair that people are trapped in this situation. Telecom providers need to step up and play their part to support their customers during this cost of living crisis.”

An Ofcom spokesperson said: “While Ofcom does not set retail prices, companies must treat customers fairly – especially during an exceptional time of hardship for many households.

“Our rules are clear: everyone must be informed in advance of any future price increases before they sign up, and we check that telephone and broadband companies are sticking to this.

“Customers can already opt-out without penalty if their supplier did not specify a price increase in the contract or did not explain it during registration. If you believe your supplier is not complying with the rules, you should first complain to them and, if necessary, escalate to an independent ombudsman who can provide an opinion on your case.”

A spokesperson for BT Consumer, covering BT, EE and Plusnet, said: “Following the announcement of the December 2022 CPI, we can confirm that our price change will take effect on March 31.

“We expect the average customer to see price increases of around £1 per week. This price increase does not apply to all our customers. More than three million BT Home Essentials, EE Mobile Basics, PAYG, BT Basic, Landline Only and Home Phone Saver customers will see price freezes through 2023.

“While telecommunications bills are a small fraction of total average household spending, we know that it all adds up. We take seriously our responsibility to ensure our services are accessible to the widest possible range of customers through our market-leading social tariffs.

“Customers who are in financial difficulties and qualify for Home Essentials can move without penalty at any time during their contract, this also applies to EE and Plusnet customers.

“We are offsetting our own rising costs due to high inflation and making the necessary investments in digital infrastructure for the UK.”

Leave a Reply

Your email address will not be published. Required fields are marked *