{"id":39826,"date":"2024-10-24T15:52:55","date_gmt":"2024-10-24T14:52:55","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=39826"},"modified":"2024-10-24T15:54:32","modified_gmt":"2024-10-24T14:54:32","slug":"new-uk-petition-calls-for-loyalty-tax-on-broadband-contracts-to-be-banned","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2024\/10\/new-uk-petition-calls-for-loyalty-tax-on-broadband-contracts-to-be-banned.html","title":{"rendered":"New UK Petition Calls for “Loyalty Tax” on Broadband Contracts to be Banned"},"content":{"rendered":"

A new petition, which has already been signed by over 56,200 people across the UK, has called on Ofcom<\/a> to tackle the issue of “loyalty penalties<\/em>” by changing the rules so that existing broadband ISP customers can access the same offers as new ones and that any end-of-contract price increases be “limited to a maximum of 30% of their current contract price<\/em>“.<\/p>\n

The issue of \u201cloyalty penalties<\/em>\u201d, which are not to be confused with the similar debate over annual mid-contract price hikes, is an old one. In short, new customers (i.e. those who hunt around for a better deal and switch ISPs) often benefit from big discounts that are designed to attract them, while existing customers who reach the end of their initial contract can be hit with huge price rises.<\/p>\n

The practice is fairly common among the largest providers and, indeed, somewhat normal in any truly competitive market. In recent years, Ofcom<\/a> has implemented various changes to tackle this, such as the introduction of more Social Tariffs<\/strong><\/a> and the new End-of-Contract Notifications<\/strong><\/a> (ECN) system. The ECN system requires all fixed broadband, mobile, home phone and pay TV providers to issue such notifications to existing subscribers at the end of their term, which is designed to keep customers informed about the best deals on their current provider and to boost switching.<\/p>\n

On top of that, the regulator has also made it quicker and easier for consumers to switch providers via their new One Touch Switching<\/strong><\/a> (OTS) system, and they’ve fostered a new Fairness Framework<\/strong><\/a> (guidelines), although the latter doesn’t seem to have had much of an impact upon this particular issue. The new Change.org petition<\/strong><\/a> thus represents another attempt by consumers to resurrect the issue of loyalty penalties.<\/p>\n

The argument is a valid one, although finding a solution remains challenging, and scrapping discounting entirely would of course hit savvy consumers who save money by switching more often or haggling (Retentions Tips<\/strong><\/a>). Not to mention that it may be difficult to police, given the variety of different ways in which consumer packages can be constructed, and could make it harder for some smaller providers and new altnets to compete against the incumbents.<\/p>\n

On the other hand, there’s certainly something to be said for fostering a more simplistic approach to pricing, which would make comparisons between different providers and packages a lot easier and potentially fairer all-round. The current approach does of course rely on the fact that a good proportion of customers will, at the end of their first contract, choose to remain with their ISP – even though prices may rise. As above, this means that scrapping the approach could result in higher prices for new customers.<\/p>\n

One other issue, which still hasn\u2019t been fully addressed, is that not all providers are clear about how much you\u2019ll pay post-contract from the product summaries on their front page. Sometimes, even after you\u2019ve gone through the entire order system, the provider still won\u2019t tell you what the normal post-contract price is – unless you dig into their small print. Ofcom<\/a> and the ASA’s recent changes around mid-contract pricing (here<\/a> and here<\/a>) may indirectly help to change that, but the results are still a bit hit-and-miss.<\/p>\n

At this point we should highlight that not all providers adopt the same model and many smaller providers, which may also offer a selection of advanced features (static IP etc.), simply charge a set monthly fee that rarely ever changes.<\/p>\n

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A new petition, which has already been signed by over 56,200 people across the UK, has called on Ofcom to tackle the issue of “loyalty penalties” by changing the rules so that existing broadband ISP customers can access the same offers as new ones and that any end-of-contract price increases be “limited to a maximum […]<\/p>\n","protected":false},"author":1,"featured_media":25708,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[36,38,34],"class_list":["post-39826","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-ofcom-regulation","tag-politics","tag-statistics"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/113362971962752429","error":""},"yoast_head":"\nNew UK Petition Calls for "Loyalty Tax" on Broadband Contracts to be Banned - ISPreview UK<\/title>\n<meta name=\"description\" content=\"A new petition, which has already been signed by over 56,200 people across the UK, has called on Ofcom to tackle the issue of "loyalty penalties" by\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2024\/10\/new-uk-petition-calls-for-loyalty-tax-on-broadband-contracts-to-be-banned.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New UK Petition Calls for "Loyalty Tax" on Broadband Contracts to be Banned - 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