Broadband providers under fire over loyalty penalties

DataIQ News

Data professionals may spend hours each day attempting to find ways of rewarding existing customers but they could soon have their work cut out in the broadband market after a new probe found that loyalty simply does not pay; those who do not shop around after their fixed rate deals expire end up being hit hard in the pocket.

That is the conclusion of a Citizens Advice Bureau investigation, which looked at the cheapest broadband deals in the UK from BT, Sky, EE, Talk Talk and Virgin Media.

After the initial affordable deals ended, researchers found BT's price rose by 67%, Sky by 53%, EE by 36% and Talk Talk by 28%.

On average, the bills increased by 43%, or £9.45 more a month, adding £113 a year, with people on a lower income found to be three times more likely to be hit by the extra cost for their loyalty.

The charity surveyed more than 3,000 broadband customers and found they stayed on the same contract for an average of four years. And more than a third of them were unaware they could face additional costs when staying loyal to a provider after the deal ends.

Pensioners were twice as likely than customers under 65 to have been on the same contract for more than 10 years.

Citizens Advice is now calling on the Government to subject broadband firms to the same level of scrutiny as energy providers. Chief executive Gillian Guy said: "Loyal broadband customers are being stung by big price rises once their fixed deal ends. People often choose their broadband deals based on the price that works for them – but our evidence shows that many do not realise the price will rise after the end of the fixed deal.

"With people staying with their supplier for an average of four years, these extra costs can run into hundreds of pounds. Older customers and those who have less money are more likely to stay with their supplier for longer meaning their loyalty penalty could reach over a thousand pounds."

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