Watchdog targets loyal broadband customer rip-off rates

UK media regulator Ofcom has announced it will crack down on broadband providers who rip off loyal customers by only providing their best deals to new subscribers.

According to the regulator, this so-called "loyalty penalty" is effectively penalising customers for remaining loyal to the same provider, with the average long-standing user paying £13 to £15 more than new customers.

Commenting on the issues, Sharon White, chief executive of Ofcom, stated that the watchdog is worried that loyal broadband customers are failing to receive the best deal they ought to deserve.

"We are concerned some customers are paying more than others for similar or worse services, particularly when introductory offers have passed," she added. "So we’re reviewing broadband pricing practices and ensuring customers get clear, accurate information from their provider about the best deals they offer."

Under new rules, broadband companies will be required to alert their customers to the best deal or tariff they are able to offer, specifically towards the end of the year and when their current discounted deal is coming to an end.

"We estimate that customers who take a landline and broadband service together are paying an average of 19 per cent more once their discounted deal has expired," Ofcom added. Additionally, the watchdog found that around half of UK households have the option of a faster broadband deal, with less than half of the 94 per cent of homes and offices with access to superfast broadband choosing to take advantage of it.

TalkTalk, one of the companies that will be affected by these new roles, has stated that it welcomes this new action to stop providers from penalising their loyal customers.

Tristia Harrison, chief executive of TalkTalk, commented: "If the market won’t follow TalkTalk’s lead voluntarily, it might be time for regulation that enforces fairer pricing."

(Image: Kainet)