Home
 » ISP News » 
Sponsored

Big UK ISPs Accused of Overcharging Customers by up to £236

Saturday, September 28th, 2019 (8:11 am) - Score 1,916
pound coins pile uk

A new study from Is My Bill Fair has resulted in the organisation claiming that existing customers of major broadband ISPs – including EE, BT, Virgin Media Plusnet, TalkTalk and Sky Broadband – are being “overcharged” between £91.20 and up to £235.56 per year as a result of the so-called “loyalty penalty.”

The use of the word “overcharge” is perhaps a bit misleading since we’re NOT talking about billing mistakes. Instead this largely reflects the difference between initial discounts and post-contract pricing. The practice of offering discounts on new subscriptions exists across nearly all service sectors and is by no means unique to broadband.

In practice what this means is that the biggest ISPs tend to offer a reduced price for the first 12-24 months of a contract term in order to attract new customers, but after this the price will inevitably rise. Such discounts and special offers are fairly normal for any aggressively competitive service market, although not all ISPs are clear enough about how much you’ll pay post-contract.

For example, with a cursory check we can see that neither Sky Broadband, Plusnet, EE nor TalkTalk currently put their post-contract pricing alongside their main packages (to see it you often have to hunt through the small print or run through an order process first), while BT and Virgin Media both do a good job of putting such detail front and centre.

In order to illuminate the average cost impact of all this Is My Bill Fair processed bill data from 100,000 customers who had visited their broadband category over the past 6 months and then compared how much existing customers were paying with that of new customers, for each provider and each specific package.

ISP Average loyalty penalty (monthly) Percentage of customers “overcharged”
BT £19.63 86%
Sky Broadband £17.80 77%
Virgin Media £15.13 77%
TalkTalk £10.66 79%
Plusnet £10.11 87%
EE £7.60 66%

In our view such discounting shouldn’t really be a concern, provided the ISPs make their post-contract prices completely clear; ideally right alongside the discounts. Equally it’s important to highlight that not all ISPs adopt the same model and many smaller providers, which may offer advanced features (static IP etc.) and better quality, simply charge a set monthly fee that rarely changes.

A few ISPs also offer an alternative approach by enabling existing customers to re-contract at a lower price point than their standard rate and alternatively a bit of haggling could save you a lot of money (see our Retentions Tips article), although only about 10% of consumers seem to do this. If you’re happy with a provider then negotiation should be your first port of call, although it may only work on a big ISP where discounts are common.

Ofcom has already moved to tackle this problem by introducing a new end-of-contract notification system from 15th February 2019 (details) and they’ve also encouraged the biggest providers to support their recent Fairness for Customers commitment, as well as related proposals for a new Fairness Framework.

On top of that the regulator has this week also extracted some related pricing commitments from the biggest broadband providers, although a few of the key changes won’t start until March or mid-2020 (here). The focus of this is also largely upon vulnerable consumers who may not switch and can remain stuck on expensive legacy packages for years.

Leave a Comment
6 Responses
  1. Avatar Herve Shango

    I hate it that VM does iths =/, so unfair.

  2. Avatar Adam Smith

    Im with talk talk and it does state on the contract how much I will be paying once 12 months is up… Looks like we have fake news on the article

    • Avatar TMG

      You’ve not read the article properly then have you. It’s on about it not being immediately obvious. It says having to go through a physical order and then get the t’s and c’s.

      Quote: For example, with a cursory check we can see that neither Sky Broadband, Plusnet, EE nor TalkTalk currently put their post-contract pricing alongside their main packages (to see it you often have to hunt through the small print or run through an order process first), while BT and Virgin Media both do a good job of putting such detail front and centre.

  3. Avatar Peter Spence

    Part of your article is contradicting…..

    You stated that major ISPs including BT, Virgin media etc, doesnt make it clear on how much customers will pay post-contract. “not all ISPs are clear enough about how much you’ll pay post-contrac”

    However further in the article you stated that “BT and Virgin Media both do a good job of putting such detail front and centre”

    Very misleading article.

    • You’re confusing the opening paragraph, which summarises what “Is My Bill Fair” are claiming, with our own interpretation of the reality later in the article. The opening paragraph also talks about the impact of post-contract pricing, while the bit where we praise BT and Virgin Media is merely looking at which providers make such pricing clear and not the amount of impact. This all seems fairly clear to me from how it’s written.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comments RSS Feed

Javascript must be enabled to post (most browsers do this automatically)

Privacy Notice: Please note that news comments are anonymous, which means that we do NOT require you to enter any real personal details to post a message. By clicking to submit a post you agree to storing your comment content, display name, IP, email and / or website details in our database, for as long as the post remains live.

Only the submitted name and comment will be displayed in public, while the rest will be kept private (we will never share this outside of ISPreview, regardless of whether the data is real or fake). This comment system uses submitted IP, email and website address data to spot abuse and spammers. All data is transferred via an encrypted (https secure) session.

NOTE 1: Sometimes your comment might not appear immediately due to site cache (this is cleared every few hours) or it may be caught by automated moderation / anti-spam.

NOTE 2: Comments that break our rules, spam, troll or post via known fake IP/proxy servers may be blocked or removed.
Cheapest Superfast ISPs
  • Hyperoptic £21.00 (*22.00)
    Avg. Speed 50Mbps, Unlimited
    Gift: None
  • SSE £22.00
    Avg. Speed 35Mbps, Unlimited (FUP)
    Gift: None
  • xln telecom £22.74 (*47.94)
    Avg. Speed 66Mbps, Unlimited (FUP)
    Gift: None
  • Post Office £22.90 (*37.00)
    Avg. Speed 38Mbps, Unlimited
    Gift: None
  • Direct Save Telecom £22.95 (*29.95)
    Avg. Speed 35Mbps, Unlimited
    Gift: None
Prices inc. Line Rental | View All
The Top 20 Category Tags
  1. BT (2555)
  2. FTTP (2302)
  3. FTTC (1688)
  4. Building Digital UK (1628)
  5. Politics (1463)
  6. Openreach (1445)
  7. Business (1277)
  8. FTTH (1133)
  9. Statistics (1120)
  10. Mobile Broadband (1071)
  11. Fibre Optic (987)
  12. Ofcom Regulation (933)
  13. Wireless Internet (932)
  14. 4G (927)
  15. Virgin Media (876)
  16. EE (607)
  17. Sky Broadband (603)
  18. TalkTalk (588)
  19. Vodafone (544)
  20. 3G (418)
Promotion
Helpful ISP Guides and Tips
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
Sponsored

Copyright © 1999 to Present - ISPreview.co.uk - All Rights Reserved - Terms , Privacy and Cookie Policy , Links , Website Rules , Contact