Problems occur when they're out of contract and their tariff increases.
A new study, backed by former TV Dragon and consumer champion, Sarah Willingham, is set to pile more misery on British households when it reveals that almost three quarters of them (72%) are paying far more than they need to for broadband as a result of 'out-of-contract' rates.
In fact, the research calculates that on average 15 million British households are paying £113 a year more than necessary. That’s a staggering £1.7bn a year of combined overspend across the country.
In Bradford we're spending £15 million too much each year. The figures are no less worrying for Kirkless where we pay £7.5 million over the odds and £3.5 million in Calderdale.
The study, by First Utility Broadband, points the finger squarely at broadband companies for not alerting their customers to these ‘out of contract’ price increases. Only 10% of broadband users say they had been contacted by their broadband provider to alert them to the end of their initial contract period and inform them the prices were going up. Once an initial contract terms ends, most major providers hike up their price by an average of 37% (or £113 a year).
All of which has seriously concerned Sarah Willingham, founder of the website www.letssavemoney.com, and has prompted her to join calls for all providers to be mandated to tell customers when their contract comes to an end, just as energy suppliers are required to do.
Sarah comments: “It’s appalling that millions of British families are being ripped off by their broadband supplier. We have already learnt that loyalty doesn’t pay in energy and it’s shocking to see the same thing happening in broadband.
“The big providers have been let off easily for far too long. Reminding customers that their contract is coming to an end shouldn’t be too much effort for providers and can help many people save hundreds of pounds.
“I strongly support First Utility’s decision for no out of contract price hike. Its determination to help customers cut overspending on broadband is something I hope Ofcom will take into account in its consultation to make the telecoms sector fairer for customers.”
Energy providers are legally required to alert customers 49 days before the end of a contract but no such regulation exists for broadband. Ofcom is currently consulting on this in order to encourage consumer engagement and help customers avoid paying out of contract charges.