- Millions overpaying for loyalty
- Regulator to step in over unfair pricing
- Many could even get faster broadband
Regulator Ofcom has recently announced that millions of customers paying extra for their broadband services because they are loyal to one provider.
This was after a review of the cost of broadband among loyal customers with 30,000 broadband customer’s bills. Ofcom is now planning steps to confront this so called ‘loyalty penalty’, which is unfair to those who choose to remain loyal to their chosen provider yet pay more than newcomers.
Plans including forcing broadband companies to alert customers when they are about to finish their contract, and offer their best deals to these customers.
“Many providers only offer their best deals to brand new customers”
Many providers only offer their best deals to brand new customers, and make it increasingly difficult for loyal long-standing customers to get these deals – or even hear about them! These new rules would mean that all customers would have access to a provider’s best deals, and would be frequently updated so as to never miss out on a bargain.
If more customers were to switch their provider or tariff more often, they could potentially avoid handing over extra money each month for the same service which others are getting for less.
Why does this happen to loyal customers?
Many providers advertise super-cheap deals which they know will catch the attention of new customers.
However, many of these deals only last for a certain number of months – and often [afterwards the price increases significantly. Many customers simply forget that the price is going up, or can’t be bothered to switch, so they stay on these expensive deals.
“By moving regularly, you can ensure you are getting use of the attractive deals presented to newcomers”
For exactly the same service as they were previously getting, a customer can find themselves paying, in some cases, £40 more a month if they don’t switch to a better broadband deal. By moving regularly, you can ensure you are getting use of the attractive deals presented to newcomers.
Which?, the consumer group, discovered that 71 per cent of broadband customers had been with their provider for at least three years, and were likely to be outside their contract. Being outside of a contract means they could to switch to a much cheaper deal aimed at new customers whenever they’d like.
Which? also found that such customers may be paying up to 89 per cent more than new customers – a harsh price to pay for not switching.
On top of this, most people are getting bad quality service from their provider.
Other research showed many loyal customers still had terrible customer service, despite paying so much for their service.[
This also relates to superfast broadband, which less than half of those who are eligible have taken up.
Those customers who are outside of their contract period and are able to switch could easily switch to a superfast broadband provider and get better service as well as saving money.
If you are outside your contract period, be sure to switch to the best deal you can – you could get more service and speed for far less money. Don’t wait – aim to lower your bills before you pay another penny too much.