Why isn't the broadband regulator protecting consumers?
With signs of a mis-selling scandal emerging, it looks like the regulator, Ofcom, is being far too lenient with the broadband market.
Ofcom did, belatedly, introduce a Voluntary Code of Practice for Broadband Speeds back in 2008, but it lacks teeth, and although we welcome moves to strengthen the code earlier this summer, they still don't go far enough.
Those providers that sign up to the revised code commit to giving consumers a more accurate and consistent estimate of the maximum speed, as well as the option to leave their contracts early – and without penalty – if their speed is "significantly lower". The rules, however, are so complex we found it almost impossible to analyse how they work.
The code also recommends that speeds should only be advertised if at least some users are actually able to achieve them – which provides the industry with a massive get-out clause.
Time for change
The problem still remains that most of us are not getting the speed we're paying for; getting out of a contract is near-impossible; switching providers is made unnecessarily opaque and complicated; and customer service is minimal.
Moneywise has had enough of Ofcom's excuses. We need a mandatory code with clear penalties for those that breach it.
Ofcom claims that such a code is impractical at present for "technical reasons" and that providers need time to implement the existing voluntary one. It also argues that it's better for the consumer that there's a voluntary regime because a mandatory one would take longer to implement – we're struggling to get our heads around that one.
Ofcom hopes that all the providers will comply with the code by 27 July 2011. When Moneywise queried whether the code will ever be made mandatory, Ofcom told us that it was only "a possibility".
Responding to the criticism, a spokesperson for Ofcom, Amber Vassiliou, says: "Broadly speaking, there is high satisfaction, good value and lots of choice in the market, and where some problems exist around switching, complaints handling and broadband speeds, we have programmes of work to address them.
"Ofcom's work on better broadband speeds and information, simpler switching processes and lower early termination charges aims to further improve the consumer's experience of broadband."
However, Moneywise is not at all convinced this will go far enough.
Do you think the regulator is doing enough to improve the broadband market? Let us know below.
The practice of a dishonest salesperson misrepresenting or misleading an investor about the characteristics of a product or service. For example, selling a person with no dependants a whole-of-life policy. There have been notable mis-selling scandals in the past, including endowment policies tied to mortgages, employees persuaded to leave final salary pensions in favour of money purchase pensions (which paid large commissions to salespeople) and payment protection insurance. There is no legal definition of mis-selling; rather the Financial Services Authority (FSA) issues clarifying guidelines and hopes companies comply with them.