Broadband customers could be overcharged by £230 a year if they don’t switch provider

Published by Stephen Little on 09 November 2018.
Last updated on 09 November 2018

Broadband and landline complainants to get automatic compensation

The super-complaint from the Citizens Advice Bureau claiming that customers who stay with the same supplier for household services are overpaying £4.1 billion a year could just be the tip of the iceberg, new research reveals.

According to ismybillfair.com data, a website which allows you to compare bills with the costs of others, broadband customers are overpaying by an average of £230 per year compared to the best current deal available from their provider.

This is more than double the £113 figure estimated by Citizens Advice.

This means they are paying £3.94 billion per year in loyalty penalties, with four out of five households paying more than they should.

The figures are based on real life bill data submitted by over 30,000 broadband customers.

However, the situation may be even worse. Many broadband customers typically stay with their provider for seven years, which means they could be stung with an overpayment of £1,380 during this period.

The data has been handed over to the Competitions and Markets Authority (CMA) to help support its investigation into the overcharging of customers.

Super complaint

Earlier this year, research from Citizens Advice found that consumers are being ripped off to the tune of £4.1 billion a year by businesses that take advantage of their loyalty.

The so-called loyalty penalty occurs when customers of a business pay higher costs year-on-year for staying with the same product, while new customers of the same business pay significantly less.

Citizens Advice says consumers are being ripped off with a loyalty penalty for broadband, home insurance, mortgages, mobile phone contracts and savings.

The charity has submitted a super-complaint to the CMA demanding the regulator outlines a plan to fix the problem.

Alex Perrin, chief executive of ismybillfair, says: “The super-complaint, triggered by Citizens Advice’s brilliant loyalty report, is a step towards bill justice for millions of people - many of whom are amongst the most vulnerable in society.”

He adds: “We’re very confident the super-complaint will lead to industry change. But investigations are rarely quick, and for every day it continues 17 million households are paying £10.8 million more than they need to.”

 

Leave a comment

Great idea to have the

Great idea to have the Newsletters - knowledge is the prize!

I am fed up with this carrot

I am fed up with this carrot dangling attitude by TV, Broadband, Phone, Mobile phone, Banks, Energy suppliers and other organisations who think it's a good idea to ignore their loyal customers and offer massive incentives to attract new customers. This merry go round must have massive financial knock on effects to consumers when people have to keep changing suppliers to get the best deal and it's time the governing bodies put a stop to it. I have been with Virgin ever since they took over and I am supposed to be a VIP customer, but every few months I have to phone up to try and twist a better deal out them, while big incentives are offered to new customers. I would change, but Sky are even worse and so are other broadband connections. Another gripe while we are at it, I pay my TV license fee, but BBC don't show any F1, motorcycle racing or boxing coverage which I follow, only costly football and other ball sports, plus athletics, which I am not interested in, so I have to pay to view mine. I grew up in a time when service was the main attraction for customers to choose to deal with a company, but that has long gone and it's time things started to swing back in that direction, not carrot dangling.

financial interest

financial interest