Ofcom intervenes on payouts
Automatic refunds agreed for telecoms failures
Big suppliers have agreed to the change
Broadband and landline customers will be refunded automatically by providers when things go wrong without having to make a claim.
Ofcom new ruling means payments will be credited to customers’ accounts for slow repairs, missed appointments and delayed installations.
BT, Sky, TalkTalk, Virgin Media and Zen Internet – who together serve around 90% of landline and broadband customers in the UK – have agreed to the change. Plusnet and EE have also indicated they will join the scheme.
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.
Ofcom accepts that 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.”
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, Ofcom 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.
Ewan Taylor-Gibson, broadband expert at uSwitch, said the plan should be welcomed as it will finally remove the onus on consumers having to manage it themselves.
“As it stands, only one in seven customers (15%) who have experienced these issues have had compensation paid out. Today’s announcement means the impetus is on providers to keep to their word,” he said.
“We’re so reliant on broadband that, for many, the prospect of any downtime may be practically unimaginable – especially for the 25% of adults who now work from home part or full time.
“While the level of compensation proposed – £25 per missed appointment for example – might not make up for missing a day’s work, the collective financial burden on providers will increase the pressure to improve service.”