Communications regulator Ofcom is forcing broadband providers to let customers walk away from contracts at any point if speeds fall below "acceptable levels".
Customers of BT, EE, Plusnet, Sky and TalkTalk can currently leave their contract penalty-free within the first three months if speeds dip below the minimum guaranteed level they were told when they signed up.
Ofcom's strengthened Code of Practice will eliminate that three-month restriction so that customers can leave without penalty at any time if the speed problems cannot be resolved.
With Virgin Media, which uses a cable network instead of copper or fibre, the regulator assumes that speeds tend to be consistent with what is advertised.
For other providers, the 'acceptable' level is based on the speeds that the slowest 10% of households on a similar connection receive. See our Free Broadband Speed Test to find out your speed and get tips on how to boost it.
Ofcom expects some providers to adopt the new code from October, and they must adhere to it by the end of January 2016.
If providers don't stick to the code, households will have to complain to their provider in the first instance and then to an ombudsman if that doesn't work. For communications providers, this will usually be the Ombudsman Services.
Ofcom adds that it can take enforcement action if providers don't follow the code.
A reliable internet connection is 'essential'
Ofcom chief executive Sharon White has also today issued four challenges for the industry. She wants to see:
- Better information: Making available clear and accurate information in advertising and at point of sale, so that consumers can genuinely compare offers and make effective choices.
- Easier switching: Ensuring straightforward processes when consumers want to switch, including cancelling services without entanglement and coordination between providers for a smooth transfer.
- Improved contract terms: Clear and fair terms with no hidden charges or lock-ins.
- Better complaints handling: Setting out simple steps when consumers wish to complain or when things go wrong. It means doing everything possible to avoid a dispute in the first place, including the opportunity for consumers to 'walk away' when services fall short. It also means clear signposting of alternative dispute resolution services, which are also free to use.
White says: "When Ofcom was established, access to a reliable internet connection and mobile phone was a 'nice to have'. Now it is essential to the functioning of the economy, to the way people work and live their lives.
"Improving delivery to consumers doesn't just fall at the feet of the regulator. The delivery of first-class communications services is primarily the responsibility of providers."
On the new code, she adds: "This will make a real difference for consumers and will encourage more people to take full advantage of competition in the sector."
Help for broadband and mobile switchers
From 20 June, Ofcom is introducing new rules in a bid to make it easier for customers to switch between broadband providers that use the Openreach network, such as BT, EE, Sky and TalkTalk.
It means customers will only need to contact their new provider to switch, and their new provider will do all the work for them, including contacting the existing provider to cancel the contract.
Ofcom says it is looking into how this might apply to Virgin Media customers, who at present won't be covered by the new rule and will still need to contact both their new provider to set up the contract and their exiting provider to cancel their deal.
Ofcom adds that it will also outline plans next month to make it easier for mobile phone customers to change provider.