‘Outrageous’ mid-contract price hikes could leave broadband customers up to £150 out of pocket, Which? warns

In the midst of ever-increasing living costs, UK broadband customers face potential charges of up to £150 beyond their expected bills across their contract period, warns consumer champion Which?

This comes in light of two consecutive years of significant price hikes.

Today, Which? spotlights the unpredictable nature of these mid-contract price rises with the initiation of their ‘The Right to Connect’ campaign.

This move seeks commitments from providers to cease such hikes and a call for Ofcom, the communications regulator, to outright ban the practice.

Key players in the broadband industry, including BT, EE, Plusnet, Shell Energy, TalkTalk, Virgin Media, and Vodafone, have been in the spotlight for their annual price escalations every April.

These are typically in line with the Consumer Price Index (CPI) or the Retail Price Index (RPI) and an added percentage, ranging between 3 to 3.9%, whose rationale remains unexplained. As a consequence, those wishing to sidestep these rises often encounter substantial fees to prematurely terminate their contracts.

Based on an analysis combining Which?’s most recent broadband survey and inflation forecasts from the Bank of England, projections suggest significant bill increases in 2024 for customers of these leading providers. The forecasts anticipate over 8% rises on average for customers of BT, EE, Plusnet, Shell Energy, TalkTalk, and Vodafone. Meanwhile, Virgin Media customers could potentially face over 10% increases.

When breaking down the potential annual impacts for 2024, customers of Virgin Media, BT, and EE may experience the most pronounced increases, with predicted jumps of £50.52, £43.68, and £43.68 respectively. In contrast, Shell Energy Broadband clients could see the most modest rise, averaging £27.16.

These projections follow a notable price surge in 2023, where many consumers grappled with increases exceeding 14%.

For those who began contracts in January 2023, this culminates in significant costs over their 18 or 24-month contracts. For instance, BT and EE customers could face average hikes of £147.43 and £147.31 respectively.

This unpredictability in billing is a point of contention for many. Separate research by Which? indicates a sweeping consensus among consumers – 78% believe that mid-contract price rises are inherently unfair, showing a pronounced preference for clear pricing in broadband contracts.

With Ofcom currently scrutinising inflation-linked, mid-contract price rises, a consultation is expected in December. Which? advocates for swift action from providers even before Ofcom’s final decision, emphasising the need for a consumer-friendly approach.

In closing remarks, Rocio Concha, Which? Director of Policy and Advocacy, underlined the integral role of broadband in modern life. She expressed the urgency for clarity in contract costs, urging providers to halt the proposed 2024 price hikes and imploring Ofcom to intercede with regulations for the benefit of consumers.

BT, acknowledging the general unwelcome nature of price hikes, justified them as essential due to the increasing costs their business encounters. The spokesperson emphasised the company’s transparency, with annual and contracted price increases. In 2023, the average increase was a bit over £1 per week, and some customers were exempted from the hike. They also highlighted their commitment to making services accessible via social tariffs.

While Shell Energy Broadband offered clarifications that have been incorporated into the press release, they chose not to give an extensive comment on the broader narrative.

TalkTalk labelled the CPI-linked price rise in April 2023 as avoidable and called upon Ofcom to address the underlying wholesale increases that result in consumer price hikes. They emphasised the need for regulatory action, especially given the prevailing exceptional circumstances, impacting both households and businesses.

Virgin Media stressed their transparent approach, notifying affected customers directly about any price changes, and allowing them an option to cancel without penalties within 30 days. Addressing rising costs, increased usage, and ongoing investment, they informed of their decision to implement inflation-linked price changes from the next April. Virgin Media also rebutted allegations from Which?, denying that their contracts might be illegal.

Vodafone opted not to comment on the matter.