LOYAL broadband customers are still being ripped off to the tune of almost £236 a year compared to the price new users pay.
That’s the findings of new research from broadband comparison tool, Is My Bill Fair, which comes a year after a super complaint on the “loyalty penalty” was first issued by Citizens Advice.
The problem is that broadband contracts often include an introductory price for 12 or 24 months, but then the cost can shoot up.
And while costs are hiked for loyal customers, providers offer cheaper deals to new users.
How much am I overpaying by?
BT is the worst offender, according to the data, which looked at the amount Is My Bill Fair users were paying compared to the cheapest deal on the market at the time.
The provider was found to overcharge 86 per cent of its users by a whopping £19.63 a month – or £236.56 a year.
It was followed by Sky and Virgin Media, which both overcharge 77 per cent of loyal customers, by £213.60 a year and £181.56 a year respectively.
TalkTalk and Plusnet were next, overcharging loyal users by £127.92 and £121.32 a year respectively.
How to bring down broadband bills
IT pays for consumers to be savvy when it comes to broadband and phone bills. Here's how to cut prices.
- If you’re out of contract or nearing the end of your deal, call your provider and say you’re going to leave unless it can better the deal you’re on.
- Check out price comparison sites, such as Is My Bill Fair, Compare The Market and uSwitch, so you know the best deals available on the market – use this data when negotiating with your current provider.
- Don’t just haggle on cost – you can negotiate for better speeds, an improved router and other freebies.
- If you don’t like what’s offered, walk away and find a better deal elsewhere.
Mark Pocock, home comms expert at comparison website BroadbandChoices.co.uk added: “When your contract is coming to an end you need to act fast, and know what your cancellation rights are at the expiry point – some providers require 30 days notice that you won’t be continuing before auto-renewing or moving you to a rolling contract.
“Be aware of your dates to ensure you never have to pay more, and are in a strong position for negotiation.”
EE, which is owned by BT, overcharged the fewest users (at 66 per cent) and by the least amount at £7.60 a month – but that still whacks £91.20 onto your annual bill.
Telecoms regulator Ofcom also found people who let their broadband contracts expire pay more than existing users.
But it found typical overpayments were slightly less at £100 a year, with around 8.8million people out of contract.
What’s being done to stop this loyalty penalty?
The original super complaint by Citizens Advice prompted an investigation by the Competition and Markets Authority, which made recommendations to the industry.
But when it comes to telecoms, Ofcom doesn’t have the power to force companies to cap prices.
Instead, BT and Sky have pledged to cap broadband prices for loyal customers from next March.
Sky has committed to there being no more than a £5 a month difference in prices between new and existing users, while BT has yet to reveal its cap.
The two providers alongside TalkTalk have also said they will allow existing customers whose contracts have come to an end to get the same deals as new customers.
TalkTalk has also promised to automatically switch vulnerable customers to the best deal as well as capping price increases for existing customers to the annual rate of inflation.
Plusnet and Virgin Media, meanwhile, told us that customers on fixed deals are notified when they sign up that prices will change at the end of the deal and throughout their contract.
Vulnerable Virgin Media customers will also soon be automatically moved on to cheaper deals or have prices frozen.
All of the providers outlined the work they’re doing to help both vulnerable and loyal customers when The Sun contacted them for comment on this story.
From February, broadband, home phone and pay-TV customers will have to be told when their contract is coming to an end, and shown the best deals available under new Ofcom rules.
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The government has already promised that every home in the UK will have “decent and affordable” broadband by March next year.
And you have to get the connection speed that’s advertised.
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