The great broadband rip-off

Published by Esther Shaw on 29 September 2010.
Last updated on 09 July 2012

Broadband campaign

UK households, for the most part, find it hard to function without a broadband connection. However, despite this, far too many of us are regularly being short-changed by our providers - putting it bluntly, we're not getting the service we're paying for.

The rise of on-demand TV and online gaming services that require fast and reliable connections have shown many of us our broadband connections are far slower than we had been led to believe.

Despite paying up to £30 a month for a service that is now regarded by many as an essential utility, new findings from industry regulator Ofcom reveal customers are being charged for a speed of up to 11.5 megabits per second (Mbps) but receive less than half of this - just 5.2Mbps on average.

While this average speed is up on last year, the gap between advertised and received speeds has grown too.

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A report from price comparison website uSwitch paints a picture of a country still struggling to access basic broadband speeds, with three million users dissatisfied with their speed, and only a third of the six million homes that pay for an 8Mbps service actually receiving it. This is simply unacceptable.

"Consumers are continually getting short shrift on actual broadband speeds; there needs to be a lot more transparency," says Ernest Doku, communications expert at uSwitch. "You wouldn't buy a sports car that only reaches 30mph, yet consumers are forking out for high-speed broadband that is stuck in the slow lane."

Ofcom says the difference between headline and actual speeds is often caused by broadband being delivered over copper lines that were originally designed for phone calls. Fair enough, but Ofcom has known about these limitations since the advent of broadband in the UK.

The only way speeds will be increased is by ripping up all those lines and replacing them with fibre optic cables. So why do the regulator and the Advertising Standards Authority allow providers to advertise speeds they cannot hope to deliver? Moneywise contacted the ASA to see if it can explain the failure, but it declined to comment.

Hidden charges

As if slow broadband speeds aren't bad enough, we are also being let down by a complete lack of transparency. "Consumers need to be aware of hidden charges," warns Charlie Ponsonby, chief executive for broadband advisory service Simplifydigital.

"Typically, contracts are 12 to 24 months long, so once you've signed up, it can be difficult to get out."

Many of us, he adds, are unaware that providers will charge a fee for cancelling within the terms of the contract – unless it has been proven the service has been 'unreasonably poor'.

"Customers can also find themselves hit with download penalties for exceeding their provider's 'fair usage' policy, which gives them a limited megabit allowance per month," Ponsonby says.

"Even users signed up to 'unlimited' packages are at risk; providers will either throttle back broadband speed dramatically, or put in place an absolute limit to downloads – despite the advertised 'unlimited' message."

Although they are a family of 'light users', the Watsons from the Wirral are being hit with an 'excess usage charge' by BT broadband almost every month. They switched from AOL to BT six months ago and now pay around £15 a month, but are repeatedly being asked to pay penalties of between £5 and £10 for exceeding their allowance.

"We're just normal broadband users; we're not downloading huge TV series or films," says Rob Watson. "We're really keen to know exactly how we're exceeding the 'fair usage' policy. But even though I've phoned BT several times to ask for a breakdown of the costs and details of how we're incurring these extra charges, it's unable to provide one.

"We have meters for our water and gas, so we can monitor how much we use, but we're completely in the dark when it comes to our broadband usage."

At the provider's mercy

Rob is very concerned about the lack of transparency. "We feel completely at the mercy of BT deciding how much it wants to charge us each month," he says.

A BT spokesperson hits back, saying: "If you exceed your monthly usage allowance, your service won't stop working. Advisory emails are sent to your BT primary email address if you reach 80% of your usage allowance in a particular month."

But there are other hidden charges to look out for. Ponsonby says that some broadband providers will impose a 'cease and re-provide' charge when customers want to move home, and some even urge you to sign a new full-term contract when you get to the new property. "This is a shrewd move, which may add another 18 or 24 months to a contract," he says.

Transparency is also a major issue when it comes to comparing broadband contracts bundled with home phone and digital TV services. "Comparing deals effectively is very difficult as every provider has a range of different options incorporating various services, with a myriad of different pricing schemes," says Alex Buttle, director of broadband and phone comparison website

Even when you try to switch, providers don't make it easy. In theory, you simply contact your current provider and ask for your Migration Authorisation Code (MAC), which your new provider will need to set up your service. There's a 30-day window to complete the process, but that's only a voluntary requirement.

However, in reality, the codes sometimes don't work or providers fail to tell BT that the line is being given up – so when a new provider contacts BT, it's told the line is already being used, and your switch is consequently cancelled.

"Some of the most common complaints we receive are due to consumers' dissatisfaction with the currently confusing switching service," says Michael Phillips, product director for "We want to see a swifter process in place."

Hopefully, this will happen after Ofcom's proposed new system for switching, which basically puts the new provider in charge of the whole process. But there's still a long way to go, so throughout our campaign we aim to help you shop around for a better deal and guide you through the switching process.

We will also look more closely at your rights, and show you how to make a complaint and contest a bill.

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