More broadband firms agree to cut prices for vulnerable and out-of-contract customers after Ofcom review
EE, Plusnet and Sky have become the latest broadband firms to commit to doing more to help vulnerable and out-of-contract customers, as part of an Ofcom review which the watchdog claims could result in total savings for consumers of £270 million per year.
Customers signing up to new broadband deals often pay a cheap promotional rate for the length of their contract, with costs rocketing once the contract term ends.
And Ofcom says that about 40% of broadband customers are out of contract – a total of 8.7 million customers – and pay an average of £4.70/month more than their provider's average price for their service. Out-of-contract customers are estimated to pay about £500 million extra in total each year compared to average prices.
Ofcom first started reviewing broadband pricing practices back in December 2018, and since then has secured various commitments from broadband providers – with all major providers offering protections to their vulnerable customers.
Now EE, Plusnet and Sky have become the latest providers to commit to automatic price reductions for vulnerable out-of-contract customers, with EE and Plusnet also promising to give existing customers who are out of contract access to new customer prices.
Remember, ultimately the best deals go to those who check if they could save by switching. Compare the best deals in your area with our Broadband Unbundled tool.
What new commitments have been made by firms?
Some of the biggest broadband providers made commitments last year to help out-of-contract and vulnerable customers, and Ofcom says it's now secured further commitments from more firms. These are:
- EE, Plusnet and Sky have committed to reduce prices automatically for vulnerable customers who are out of contract. They join BT, TalkTalk and Virgin Media, which committed to do this last September.
- EE and Plusnet have committed to give all existing customers access to new customer prices. They join BT, Sky and TalkTalk. However, while the firms have committed to offering the same deals in terms of monthly price, they don't have to offer existing customers extra perks such as cashback or vouchers, which may be available to switchers.
What else does the watchdog want broadband providers to do?
Ofcom says that while it welcomes the action broadband providers have taken to protect customers who are struggling due to the coronavirus pandemic, it wants firms to do more generally to protect vulnerable customers from high out-of-contract prices. It is now calling for firms to:
- Identify vulnerable customers more effectively. Ofcom published guidance for firms last week about how they should treat vulnerable customers – including those who are in debt, experiencing physical or mental health issues, are bereaved or have been a victim of crime.
- Offer better support to vulnerable customers who have been out of contract for a long time. Ofcom says firms should consider strengthening their existing commitments to vulnerable customers to make sure they don't pay high prices.
- Give extra help to customers who are struggling to pay their bills. Ofcom says firms should be proactive and engage with customers who are in financial difficulty – which could include offering a cheaper tariff to a customer who is in debt and paying for a high out-of-contract tariff.
Ofcom says it will continue to monitor broadband prices, and step in to protect consumers if needed.
You need to switch regularly to bag the cheapest deals
If you want to constantly win the broadband price game, you need to be on the ball. Even though some providers will offer the 'same' deals to new and existing customers, switchers may also be offered perks such as vouchers and cashback (you'll see these deals on our Broadband Unbundled tool).
Many broadband providers bank on you not changing once your initial promotional rate ends, so follow these steps to ensure you're always on the best deal:
1. Check when your contract ends – if you leave before this date, you will usually be charged a penalty.
2. Around one month before it ends, compare the broadband deals available in your area using our Broadband Unbundled tool.
3. Switch to the best deal for you – your new provider will usually notify your existing provider and arrange a switch date.
4. Make sure you claim and activate any rewards as part of the deal.
For more, see our How to get cheap broadband guide.
Don't want to switch? Haggle with your current provider
For those who don't want to switch, the other option to cut costs if you're out of contract is to haggle.
See our Haggle with Service Providers guide for detailed tips, but for starters here are a few...
- Benchmark the best deal elsewhere, so you ask for a realistic discount (compare broadband with our Broadband Unbundled tool).
- Get through to the retentions (sometimes called disconnections) department. They have the most power to slash costs, as their job is to keep you.
- Use charm and be friendly. Aggression or anger will just put their back up.
- Don't panic if they call your bluff and say they'll disconnect you.
- Problems mean discounts, so if you've had issues in the past – eg, slow broadband – politely tell the firm when you haggle.
- Never go with the first offer. Chances are it's not the best deal. Remember, be firm.
- The salesperson may push you to agree because it's a 'limited-time offer' – don't feel pressured into agreeing to the new price or deal unless you're certain.
- Vote with your feet. If you don't get what you want, you should seriously consider leaving.