Automatic compensation for broadband and landline users

10 Nov 2017 02:27 PM

Broadband and landline customers will get money back from their providers when things go wrong, without having to claim it, following an Ofcom review. 

  • Customers set for £142m in payouts – around nine times the current level
  • Major telecoms providers agree to Ofcom’s requirements for automatic redress
  • New compensation scheme will benefit millions who suffer from poor service

Telecoms companies have not always kept pace with customers’ increasing needs when it comes to service quality.1 Many people are not getting the standard they expect, or being adequately compensated when service falls short.

So Ofcom set out plans for people to be compensated automatically by providers for slow repairs, missed appointments and delayed installations. This means credit on a customer’s account – without having to ask.

As a result of Ofcom’s intervention, BT, Sky, TalkTalk, Virgin Media and Zen Internet – who together serve around 90% of landline and broadband customers in the UK – have agreed to introduce automatic compensation,2 which will reflect the harm consumers suffer when things go wrong. This is how it will work:

Image shows types of problems experienced by landline or broadband customers, and the amount of compensation they may be due. If your service has stopped working and is not fully fixed after two full working days, you could get £8 for each calendar day that the service is not repaired. If an engineer does not turn up for a scheduled appointment, or it is cancelled with less than 24 hours' notice, you could get £25 per missed appointment. If your provider promises to start a new service on a particular date, but fails to do so, you could get £5 for each calendar day of the delay, including the missed start date.

At present, compensation is paid out in around one in seven cases (15%) of landline or broadband customers suffering slow repairs, delayed installations or missed engineer appointments; and even then, only in small amounts.3

Launching the first ever automatic compensation scheme for telecoms customers will be complex, and require significant changes to providers’ billing systems, online accounts and call centres. So there will be a 15-month implementation period before it comes into effect to ensure a smooth introduction. Consumers currently experiencing problems can find advice on Ofcom’s website on what to do if they are unhappy with the service they receive.

Lindsey Fussell, Ofcom’s Consumer Group Director, said: “Waiting too long for your landline or broadband to be fixed is frustrating enough, without having to fight for compensation.

“So providers will have to pay money back automatically, whenever repairs or installations don’t happen on time, or an engineer doesn’t turn up. People will get the money they deserve, while providers will want to work harder to improve their service.”

Alex Neill, Which? Managing Director of Home Services, said: “We are pleased that compensation for poor broadband is going to become automatic, as it is now such an essential part of all of our everyday lives.

“For all consumers to get what they're entitled to, it’s vital that all providers play fair and sign up to this scheme.”

Ofcom will closely monitor the industry scheme, and review it one year after being implemented to ensure it’s working for consumers. If not, we will step in.4

Automatic compensation is one of several areas where Ofcom is working to protect telecoms customers. These include ensuring lower charges for vulnerable landline customers; better information on broadband speeds before entering a contract; detailed information to shine a light on how different providers perform; and fining companies for poor behaviour.

Helping small businesses

Around one third of small and medium-sized enterprises (SMEs) choose residential landline and broadband services, and so will also benefit from the compensation scheme.

Also, many standard business contracts already provide compensation for a number of problems. However, we found that around half (49%) of SMEs did not know if they were entitled to compensation when service falls short.

Therefore, Ofcom is introducing new rules to ensure all SMEs are given clearer, more detailed information upfront about what service quality to expect. This includes whether they can claim compensation when problems occur.

Notes to editors

  1. Our research found that nine in ten adults report going online every day, and three-quarters of internet users say it is important to their daily lives.
  2. We understand Plusnet and EE have also indicated they will join the scheme.
  3. For example, we estimate people receive an average of £3.69 per day for loss of service, and £2.39 per day for delayed installations.
  4. Earlier this year, Parliament made Ofcom’s powers in this area clearer in the Digital Economy Act 2017.
  5. The new automatic compensation scheme will apply to fixed broadband and landline telephone services. Our analysis shows that the number of mobile customers likely to lose service for more than 24 hours is low, and mobile customers currently receive more compensation than broadband and landline customers.