Broadband and landline customers who suffer poor service could get millions of pounds of money back automatically under a scheme proposed by Ofcom.
The telecom watchdog has published proposals to make providers pay for slow repairs and missed deadlines and appointments.
It estimates that as many as 2.6 million customers could receive up to a total of £185m in compensation payments each year under the scheme.
“When a customer’s landline or broadband goes wrong, that is frustrating enough, without having to fight tooth and nail to get fair compensation from the provider,” said Lindsey Fussell, Ofcom’s consumer group director.
“We’re proposing new rules to force providers to pay money back to customers automatically, whenever repairs or installations don’t happen on time, or when people wait in for an engineer who doesn’t turn up.
“This would mean customers are properly compensated, while providers will want to work harder to improve their service.”
Ofcom has launched a consultation on its proposals, which would see customers receive automatic compensation in the form of a cash payment or credit to their bill for failings in three specific areas:
- If a customer’s landline or broadband is not fixed quickly enough.
- If new services are not up and running on the day promised.
- If an engineer fails to arrive for a scheduled appointment.
Ofcom said it would set payments “designed to reflect the degree of harm suffered by consumers”, and gave a number of examples.
If a broadband connection or landline is not fully fixed after two working days the provider would have to pay £10 a day until it is repaired.
If an engineer does not turn up for an appointment or cancels with less than 24 hours’ notice, the payment would be £30.
If a provider fails to start a service on the agreed date, it would have to pay £6 for each day of delay, including the missed start date.
Richard Neudegg, the head of regulation at the price comparison service uSwitch, said: “We welcome Ofcom’s proposals as this will firmly place the impetus on providers to keep to their word.
“We shouldn’t pretend the level of compensation proposed – £30 per missed appointment for example – will be enough to make up for missing a day’s work. But, even at a modest level of compensation per user, the collective financial burden on providers will increase the pressure to improve service.”
BT, Sky and Virgin Media have jointly put forward a draft proposal to introduce automatic compensation through a voluntary industry code of practice, but Ofcom said “at this stage, we do not consider that this proposal sufficiently meets our concerns when quality of service falls short”.
The industry scheme offered to pay a minimum of £3 a day for missed service activation, half what Ofcom is proposing.
And £3 a day for delays to repairs starting three days after any loss of service is reported, less than a third of Ofcom’s proposed £6 a day starting from two working days after a loss of service is reported.
A missed engineering appointment would carry a charge of £20, compared to Ofcom’s £30.
Other broadband and landline providers including TalkTalk and Vodafone did not sign up to the industry proposal.
“It’s important that customers are treated fairly when services can’t be delivered, but this is best achieved through a robust industry-led approach,” said a spokesman for Virgin Media.
“The industry is working together on ambitious reforms that would incentivise communications providers to compete to provide customers with a better service, while also setting minimum standards that providers would have to meet.”
Ofcom based its potential estimate of £185m in annual compensation payments on figures showing that there are currently 7.2m instances a year in which customers suffer delayed repairs, missed appointments or late installations.
Only 1.1m were compensated, with a total payout of £16.3m.
“Compensation payments are currently given ad-hoc to only a minority of those suffering problems [in up to 15% of cases], and can fail to adequately reflect the harm caused,” Ofcom said.
The minister of state for digital and culture, Matt Hancock, said: “Too many people are suffering from poor customer service when things go wrong with their broadband and phone lines. These changes will help make sure people are not cut off from friends, family and work for days on end, and are properly compensated if problems aren’t fixed quickly enough.”
Ofcom’s research also shows that 5.7 million consumers experience a loss of landline or broadband service each year.
Engineers fail to turn up to around 250,000 appointments a year and about 1.3 million people are affected by late installations.
Ofcom said its proposed compensation scheme does not apply to mobile services as they “already make significant compensation payments to customers” and its research showd that less than 1% of customers lose service for more than 24 hours.
“Broadband has become a modern-day essential, so it is only right that consumers should get compensation when their provider fails to deliver,” said Alex Neill, the managing director of home services at Which?
“Ofcom now needs to swiftly push ahead with these proposals and ensure that this and other measures help to significantly improve the service that broadband customers receive.”
The move comes in the same week that Ofcom fined BT-owned Plusnet £880,000 for continuing to charge more than 1,000 customers more than £500,000 even though they had cancelled their accounts.
In February, Ofcom sharply criticised providers for offering landline-only customers poor value for money, and unveiled plans to force BT, the dominant provider, to cut bills by at least £5 a month, benefiting about 2.3 million people.
