Broadband customers paying the price for loyalty, says Citizens Advice
Broadband customers on the cheapest deals are being hit with an average price increase of 43% when their deal ends, research by Citizens Advice has revealed.
Analysis of five providers’ most basic broadband packages found that bills go up by an average of £9.45 a month or £113 a year at the end of a fixed contract period.
Citizens Advice said more than a third (35%) of broadband customers don’t realise they could face price hikes for staying with the same provider after their initial deal ends.
According to the charity’s research, BT’s cheapest broadband deal jumps from £24.49 a month during the first 12 months to £40.99 thereafter – an increase of 67% or £16.50 a month.
Citizens Advice says that’s a “loyalty penalty” of £198 a year or £594 over four years – the average time customers stay with their provider.
Basic broadband from Sky goes up 53% after 12 month, from £18.99 to £28.99 – an annual penalty of £120.
EE’s cheapest deal goes from £21 a month to £28.50 after 18 months, a rise of 36%. And TalkTalk’s basic package goes up 28%, from £20 for the first 24 months to £25.50 after that.
The Virgin Media deal analysed by Citizens Advice was the most expensive during the initial 12 months at £32.25 but stayed the same price after the deal ended.
'Customers are being stung'
Citizens Advice CEO Gillian Guy said: “Loyal broadband customers are being stung by big price rises once their fixed deal ends.
“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.”
Among those hit hardest by so-called loyalty penalties are older people and those on lower incomes.
Citizens Advice’s survey of 3,000 consumers found that broadband customers over 65 are more than twice as likely to have been in a contract for more than 10 years than those under 65.
People on low incomes are almost three times more likely than high earners to be in their contracts for 10 years or more.
Ms Guy added: “Older customers and those who have less money are more likely to stay with their supplier for longer meaning their loyalty penalty could reach over a thousand pounds.
“The government has rightly put energy firms on warning for how they treat loyal customers – the actions of broadband firms warrant similar scrutiny.
“Extra protections for vulnerable consumers are also a must.”
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