Broadband compensation: companies try to avoid paying £52 million in compensation

Broadband customers are being denied £52 million in compensation from BT, Virgin Media and Sky for delays and poor service.

Broadband giants are trying to wriggle out of paying £52 million in compensation for shoddy service, according to Citizens Advice.

The organisation has accused BT, Virgin Media and Sky of ‘short-changing’ broadband customers by trying to water down Ofcom's plan for mandatory payments with their own voluntary system.

Under the telecoms watchdog's proposals, households will automatically get refunds for late installations, slow repairs and engineers who fail to show up for appointments.

It estimates that there are about 5.7 million cases of households losing their landline or broadband service each year, with engineers failing to show up for around 250,000 appointments.

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How the broadband providers see it

In response, BT, Virgin Media and Sky have come back with a counter-proposal outlining a voluntary scheme in which the provider decides if compensation is given out as well as how much.

The minimum payment they set out was as much as £10 less for a missed appointment than the minimum proposed by Ofcom.

Take a look at the figures below.

Source: Citizens Advice

Citizens Advice has calculated that customers face a 32% reduction in compensation from providers compared to Ofcom’s proposal. That amounts to a massive £52 million.

Remind me what the compensation scheme is

Ofcom began consulting on automatically compensating customers for ‘quality of service’ problems back in March this year.

In a similar way to water and energy, the regulator proposed compulsory payment when there were:

• Delays to repairs following a loss of service;
• Delays in getting a broadband service installed beyond the date the provider committed to;
• Missed appointments;
• Appointments cancelled with less than 24 hours’ notice.

Compensation would usually be paid through rebates on people’s bills.

Read more at Broadband and landline compensation: Ofcom proposes new rules to fight bad service.

How effective could it be?

Citizens Advice carried out research which found that, out of 1,000 cases reported to the regulator between August 2016 and May 2017, 18% of callers would be eligible for compensation under the scheme.

Gillian Guy, chief executive of Citizens Advice, said:

“A watered-down compensation scheme would shortchange customers by millions of pounds.

“Ofcom was right to propose a mandatory scheme to automatically compensate customers when they get a poor service from their provider, this should put an end to consumers having to negotiate with their provider to get the compensation they deserve.”

Figures from Citizens Advice reveal that only 15% of people who complain to their providers receive any kind of compensation.

It's still not brilliant, but twice as many people who had complained about other regulated services like energy and water landed financial compensation.

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