Broadband customers trapped by choice between huge mid-contract price hikes or exit fees of over £200, Which? warns

UK telecoms firms have been called out by consumer champion Which? for imposing mid-contract price hikes that trap broadband customers in a “lose-lose situation” of either accepting exorbitant increases or paying exit fees of over £200.

Research from Which? reveals that firms such as BT, EE, Plusnet, Shell Energy Broadband, TalkTalk and Vodafone raise prices annually in line with the Consumer Price Index (CPI) plus an additional 3 to 3.9%.

This year, many customers are facing mid-contract price hikes of more than 14%.

Which? has calculated how much an in-contract customer of each provider could see their payments rise by.

For example, the average EE customer would see the largest potential annual increase of £66.89, closely followed by BT customers who could pay an extra £65.59 a year.

TalkTalk and Vodafone customers could pay an extra £54.86 and £54.22 a year respectively.

Ofcom rules state that telecoms providers must offer customers the right to exit their contract penalty-free if they are subject to unexpected price rises that are not provided for in their contract.

However, because mid-contract price rises are written into the terms and conditions of some people’s contracts, Ofcom rules that in those cases, the customer does not have the right to exit penalty-free.

This means customers have no choice but to accept the new higher price or pay an exit fee to terminate their contract.

Which? is calling on all providers to carefully assess what level of mid-contract price rises can be justified in the current economic climate and allow customers to leave their contract without penalty if prices are hiked mid-contract.

Which? calculated the exit fee the average customer of each provider with 12 months remaining on their contract would face if they left early. BT customers face the highest exit fees of £219.04.

This is followed by Shell Energy Broadband, EE and Plusnet customers, who would pay £160.20, £150.49 and £144.75 respectively.

Vodafone and TalkTalk customers would pay the lowest exit fees of £123.72 and £122.40 respectively. Shell Energy Broadband and TalkTalk have fixed exit fees, while the others are calculated based on the average monthly price customers pay according to Which?’s broadband survey.

A good broadband connection is essential to modern life. Which? is calling on all providers to carefully assess what level of mid-contract price rises can be justified in the current economic climate and allow customers to leave their contract without penalty if prices are hiked mid-contract – regardless of whether or not these increases can be said to be ‘transparent’.

While Sky and Virgin Media have not announced this year’s approach to price increases, they traditionally allow their customers to haggle or switch when notified of such hikes.

Other providers commit to keep prices the same for the duration of people’s contract. For example, Zen Internet, Hyperoptic and SSE all promise not to raise prices during people’s minimum contract period.

While these are all important steps in the right direction, all providers need to step up and play their part to support their customers through the cost of living crisis.

Which? says consumers should not be left trapped in unaffordable contracts – and should be able to leave without penalty if they do not want to stay with their current provider or haggle for a better offer if they prefer to stay with their provider.

Rocio Concha, Which? Director of Policy and Advocacy, said:

“It’s hugely concerning that many broadband customers could find themselves trapped in a lose-lose situation where they either have to accept exorbitant – and difficult to justify – mid-contract price hikes this Spring or pay costly exit fees to leave their contract early and find a better deal.

“Which? is calling on providers to let their customers leave without penalty if they face mid-contract price hikes. Providers should also carefully consider the level of any price rises when many consumers are already under huge financial pressure.

“With many households struggling to make ends meet, it is completely unfair that people are trapped in this situation. Telecoms providers need to step up and play their part to support their customers through the cost of living crisis.”