Automatic price hikes – you could be overpaying £192 for your broadband

Broadband customers who stay with their provider past their initial minimum contract are being hit with price hikes of up to £192 a year unless they renegotiate with their current provider or switch away to another firm, according to new Which? analysis.

The consumer champion analysed current entry-level fibre broadband and phone deals across 12 of the biggest broadband providers on the market and found that some suppliers’ prices go by up to 60 per cent after the initial contact period.

The new research has found that customers signing up to the M50 Virgin Media tariff are at risk of the biggest monetary hike at the end of their initial 12-month contract – an extra £16 a month or an extra £192 over a year if they don’t renegotiate a better deal or switch provider during this time.

Those who sign up to TalkTalk’s Faster Fibre Broadband package would see a 60 per cent rise from £22.45 to £36 a month or £162 over the course of the year.

The Post Office’s entry-level fibre broadband package for new customers starts at £24 a month but for those who choose to stay past the minimum term the monthly cost rises by 54 per cent to £37 a month which means anyone who signs up to this contract and doesn’t try to lower their cost could be looking at paying £156 more over the next 12 months.

The analysis also revealed that the price of John Lewis Broadband’s Fibre deal will increase by 38 per cent once the 12 month period is over, from £27.50 to £38 or £126 a year.

Anyone taking up a contract with SSE would be looking at an increase of 43 per cent once the initial 18-month contract is up, from £23 to £33 a month and adding up to £120 a year if they don’t either haggle or switch provider during that time.

EE’s fibre package is currently available for £28 a month, but once the minimum 18-month contract is up, the cost increases automatically by 32 per cent to £37 – potentially adding up to £108 over the course of a year for customers who do nothing.

For those who take up a contract with Plusnet this month, the current offer for their entry-level fibre deal is £24.99 but after the first 18 months customers who don’t engage with their supplier or shop around risk paying 40 per cent more – that’s £34.98 or £119.88 over the next 12 months.

Sky might be better known for its TV packages than for broadband and phone but for its only fibre deal, customers could face a hike of 25 per cent from £29.50 to £37 after 18 months, which could be £90 more a year.

BT’s Superfast Fibre Essential package is currently available for £31.99 a month, but after that, it goes up 19 per cent to £37.99 a month – and could leave complacent customers paying £72 more over the course of a year.

Customers signing up to Vodafone’s Superfast 1 deal face a rise from £24 a month for the first 18 months to £27 a month – a rise of 12 per cent or a less noticeable £36 over 12 months for customers who do not seek to switch or haggle.

The consumer champion found that Utility Warehouse and Zen internet both keep their prices the same for new customers and customers who stay put, with no hike after the minimum term.

While providers are upfront about the standard cost after the initial offer period, it is easy for customers to lose track of when their contract is coming to an end as they are not always aware and risk being caught out if they don’t take some sort of action.

This is why it is important for customers to know when they need to shop around or call up their provider and renegotiate a better deal.

From February, TV, mobile and home phone providers will have to notify customers when their contract is coming to an end and inform them of their best deals available. However, providers will only show their own deals and customers will still need to shop around to get a good view of the whole market.

Last month, the biggest broadband providers signed up to Ofcom’s fairness commitments, promising to help customers find the best and most suitable deals for them.

They also pledged to make sure that customers are kept well informed and well-equipped to make good decisions about their broadband as well as their pay-TV and mobile contracts.

The regulator said it will continue to monitor companies closely and will intervene when it feels firms are falling short of their commitments to customers.

Natalie Hitchins, Which? Head of Home Products and Services, said:

“These findings continue to show it is imperative that broadband customers who are out of contract either contact their supplier to secure a good deal or shop around and look to switch elsewhere.

“While there is nothing wrong with staying with your supplier if you are happy with your service, it is worth noting that without doing anything at the end of the minimum term you could end up paying over the odds. You might save yourself a lot of money by haggling.”

ENDS

Notes to editors:

Customers looking for cheaper broadband can compare deals with Which? Switch Broadband, a transparent and impartial way to compare tariffs and find the best broadband supplier.

Which? analysis of broadband introductory offers on entry-level broadband deals was conducted on the 12th June and included BT, Virgin Media, Vodafone, EE, SSE, Plusnet, Sky, TalkTalk, John Lewis, Utility Warehouse and Zen Internet.

Table shows the difference between the original offer price and the increased cost after this period is over.

Press Release: broadband, broadband customers, customers, loyalty penalty, Natalie Hitchins, price hike