Broadband customers charged 'loyalty penalty'
Loyal broadband customers are hit with an average price rise of £113 a year – or 43% – when their fixed term contract ends.
This is according to new research by Citizens Advice, which analysed the cheapest basic broadband deals from five of the largest suppliers, and found that prices jumped by up to £198 a year – see the table below for more on this.
The extra £198 people are charged once their initial contract period ends has also risen over the last six years. In 2011, research found consumers were paying on average £19 to £22 more per year depending on their broadband connection.
But more than a third (35%) of unsuspecting consumers don’t realise they could face these price hikes by staying on the same contract with their provider after their initial deal ends.
As a result, the charity is calling on broadband providers to include up-front information in advertising and when people take out the contract – instead of details only being included in the terms and conditions. It also wants providers to send texts when fixed price deals come to an end.
Citizens Advice also believes extra protections are needed for customers who are more vulnerable, as it found that older and poorer customers are more likely to face a loyalty penalty because they stay with the same supplier for longer.
Gillian Guy, chief executive of Citizens Advice, says: “People often choose their broadband deals based on the price that works for them - but our evidence shows that many do not realise the price will rise after the end of the fixed deal. With people staying with their supplier for an average of four years, these extra costs can run into hundreds of pounds.”
|Provider & cheapest broadband deal||Monthly tariff during fixed term||Monthly tariff after fixed term||% increase||Monthly difference||Annual loyalty penalty|
|BT 12 month||£24.49||£40.99||67%||£16.50||£198|
|EE 18 month||£21||£28.50||36%||£7.50||£90|
|Sky 12 month||£18.99||£28.99||53%||£10||£120|
|TalkTalk 24 month||£20||£25.50||28%||£5.50||£66|
|Virgin Media 12 month||£32.25||£32.25||0%||£0||£0|
Source: Citizens Advice, as at 10 March 2017.