Broadband and landline customers who suffer poor service will receive a share of more than £140m a year from a new automatic compensation scheme being set up by the UK’s biggest providers.
The telecoms regulator, Ofcom, said that the new scheme – which will make providers pay automatically for slow repairs, missed appointments and delayed installations – could result in customers receiving a total of £142m a year in payouts.
Currently, providers pay out only about £16m a year to customers who make complaints about repairs, installations and engineer visits.
If a broadband connection or landline is not fully fixed after two working days the provider will have to pay £8 a day until it is repaired.
The payment will be £25 if an engineer does not turn up for an appointment or cancels with less than 24 hours’ notice.
Should a provider fail to start a service on a particular date it would have to pay £5 for each day of delay, including the missed start date. Customers will receive the compensation as a credit on their account.
“Waiting too long for your landline or broadband to be fixed is frustrating enough without having to fight for compensation,” said Lindsey Fussell, Ofcom’s consumer group director.
“So providers will have to pay 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.”
Ofcom said many people are not getting the standard of service they expect, or are not being adequately compensated when service falls short.
At present, compensation is paid out in only about 15% of cases where providers have failed to meet their obligations, working out at a meagre £3.69 average per day of loss of service, and £2.39 per day for delayed installations.
Following a review and consultation with the industry, Ofcom has beefed up the payment levels to “reflect the harm consumers suffer when things go wrong”.
“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,” said Alex Neill, managing director of home services at Which? “For all consumers to get what they are entitled to it is vital that all providers play fair and sign up to this scheme.”
Ofcom said that BT, Sky, TalkTalk, Virgin Media and Zen Internet, which together account for about 90% of landline and broadband customers in the UK, have agreed to introduce the automatic compensation scheme. It is understood that Plusnet and EE have also indicated that they intend to join the scheme. Other broadband providers including Vodafone and O2 have not signed up to the scheme.
Ofcom’s research shows that 5.7 million consumers experience a loss of landline or broadband service each year.
Engineers fail to turn up to around 250,000 appointments a year and about 1.3 million people are affected by late installations.
Ofcom said it will take 15 months to implement the automatic compensation scheme because of the complexity of providers’ having to change their billing systems, online accounts and call centres.
The regulator said it would “closely monitor” the scheme and review it after one-year to make sure it is working for consumers. “If not, we will step in,” it added.
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