Millions of households face being hit with ‘outrageous’ £150 bill hikes – are you affected?
MILLIONS of broadband customers could pay £150 more than they expected to over two years due to “outrageous” price rises.
Consumer champion Which? has now called on regulator Ofcom to ban mid-contract price rises.
It comes as it found that BT, EE, Plusnet, Shell Energy, TalkTalk and Vodafone customers could see increases of more than 8% on average in 2024.
Virgin Media customers could also see rises of more than 10%, based on analysis of Bank of England inflation forecasts.
Many of the biggest broadband firms – such as BT, EE, Plusnet, Shell Energy, TalkTalk, Virgin Media and Vodafone – raise prices every April in line with the Consumer Price Index (CPI) or the Retail Price Index (RPI) plus an additional 3%, 3.7% or 3.9%.
The CPI measures the monthly change in prices paid by consumers on an average basket of goods and services.
Customers who want to avoid these hikes can be charged penalty exit fees to leave their contract early.
Based on average contract amounts from the Which? 2023 broadband survey; Virgin Media, BT and EE customers could see the biggest annual increases of £50.52, £43.68 and £43.68 respectively in the year from April 2024.
Shell Energy Broadband customers could see the smallest annual price hike of £27.16 on average.
These hikes would come on top of the more than 14% mid-contract uplifts many consumers faced in 2023.
Which? also calculated how much extra these two rounds of price hikes could cost a customer for each provider who took out a deal in January 2023 over the course of their 18 or 24-month contract.
Based on average amounts from the Which? 2023 survey, BT and EE customers who took out a contract in January 2023 could see some of the highest average price hikes of £147.43 and £147.31, while Vodafone and Plusnet customers could see rises of £122.38 and £117.87 respectively.
TalkTalk customers could see a smaller hike of £76.09 on average over the course of shorter 18-month contracts.
Shell Energy Broadband did not apply its 2023 inflation-linked price hikes of 12.5% to customers who joined from January to March 2023.
However, if a Shell Energy customer joined before January 2023 then, based on average amounts from the 2023 broadband survey, they would pay an extra £45.27 a year from Spring 2023 to Spring 2024.
Virgin Media did not use inflation-linked price hikes in 2023 but some customers’ prices did increase by an average of 13.8% per cent due to ad hoc price rises, according to Which?
According to Virgin Media, customers who signed up after November 2022 would not have faced the ad hoc price rise in Spring 2023.
Those on a fixed-price promotional deal – like those offered to new customers – would also not have seen the price hikes take effect until after their deal ended.
Which? argues that it is unfair for consumers to be signed up to deals that do not give them certainty about how much they can expect to pay over the course of their contract.
A survey by the group found that 78% of consumers believe that mid-contract price hikes are always unfair and that people overwhelmingly value pricing certainty for broadband contracts.
Which? has launched The Right to Connect campaign calling for clearer and fairer pricing for telecoms customers and an end to unpredictable mid-contract price hikes.
Ofcom is currently reviewing inflation-linked, mid-contract price rises and is due to publish its consultation in December.
The regulator launched its investigation in December 2022 into whether telecoms providers were honest with customers about in-contract price hikes.
It was looking into whether providers ripped off customers who took out contracts between March 2021 and June 2022.
If the customer had not agreed to the terms at the time of signing up because they had not been made clear enough, Ofcom said that the providers should have notified them and offered them a right-to-exit penalty fee.
If these customers were misled then they could be owed compensation.
In January this year, Ofcom also announced that it was investigating BT.
BT said at the time it was “fully engaged with Ofcom during the course of its investigation.”
Rocio Concha, Which? director of policy and advocacy, said: “From working and school to online banking and social media, a good broadband and mobile connection is essential to everyday modern life.
“That’s why it’s outrageous that unpredictable mid-contract price hikes have been allowed to continue in the telecoms industry for so long.
“Which? is calling on all providers to do the right thing and cancel 2024’s above-inflation price hikes.
“Consumers need to know exactly how much their contract will cost when they sign up.”
Virgin Media said that it is “always clear and transparent with customers about any price increases and wrote directly to all customers who received one this year.
The provider said they notified them of their “exact” increase and gave them a right to cancel without penalty within 30 days.
A BT Consumer spokeswoman commented: “We understand that price rises are never wanted nor welcomed but recognise them as a necessary thing to do given the rising costs our business faces.”
What to do if you have a problem with your broadband provider
You should first contact your broadband provider’s customer services department and explain the problem.
If this does not get the issue resolved, you can make a formal complaint to the company.
Details of how to do this will be on the back of your bill and on the company’s website.
If you are still having no luck in resolving your complaint, after eight weeks you can take your dispute to the appropriate Alternative Dispute Resolution scheme.
This is a free service and will act as an independent middleman between yourself and the service provider when an initial complaint cannot be resolved.
There are two ADR schemes in the UK; Ombudsman Services: Communication and CISAS.