Broadband customers overpaying by £251m
Households are paying an average of £90 more than they should for broadband, due to not being notified when their contract is ending.
The regulator Ofcom introduced new rules in February 2020 that obliged broadband firms to tell customers when their contract had finished, and provide details of its best deals. Consumers whose contract is coming to an end should receive an ECN by letter, text or email between 10 and 40 days before their deal expires.
According to Uswitch, more than eight million broadband bill-payers should have received an ECN since they were introduced. But almost three million broadband customers whose deal expired in the past 12 months say they didn’t receive an ECN.
The price comparison service estimated that this could potentially cost them up to £251m a year in savings, according to a survey of more than 17,000 broadband users. It found that being on an expired broadband tariff costs about £90 extra a year on average.
Uswitch.com is urging suppliers to be more consistent in ensuring customers engage and act on ECNs, and is calling on Ofcom to ensure that no sharp practices are being used to dissuade consumers from taking action.
Of the five million broadband consumers who did receive an ECN in the past 12 months, more than four million (88%) used the information to switch to a better deal, either with their current provider or a competitor. About one in eight (12%) people did nothing.
Customers whose deals have ended should receive an out-of-contract reminder once a year. This means that those whose deals had expired before 14 February 2020 should get one before 13 February 2021. However, by 1 November, only six in 10 (62%) broadband users in this situation had received one, according to Uswitch.
The price comparison website warned that language used in these notifications could mean that people fail to realise they have even received the document, reducing the chances they will open it or take action promptly.
Subject lines for some ECN samples seen by Uswitch use a neutral tone and talk about “An update to your broadband service” or “A little reminder about your contract”.
Uswitch has also seen examples of providers extending pricing discounts beyond contract end dates, creating a loophole and avoiding the requirement of sending a formal notice when these new discounts end.
Richard Neudegg, head of regulation at Uswitch.com, said: “Millions of broadband customers have received an end-of-contract notification or out-of-contract reminder in the last year, and it’s great to see that the vast majority have acted to get themselves a better deal.
“However, the fact that a third of consumers whose contract was due to end say they didn’t, or couldn’t recall, receiving an end-of-contract notification should ring alarm bells.
“More must be done to build on the success of these notifications so that all customers have a fair chance of engaging when their contract comes to an end.
“When providers choose language in their notices which lacks the priority or formality that might be expected for such important information, consumers can be forgiven for missing that they have received something that requires action.”