Are you paying too much for your broadband?

Slow speeds, rising prices and router failures have long been common gripes of broadband users in the UK. Added to that, it seems likely that millions are being charged too much for their service.

A new push for customers to avoid unnecessary price increases was launched by the communications regulator last week when Ofcom proposed providers be compelled to tell people when they were at the end of their minimum contract period.

It is estimated that more than 10 million people are on deals where there is an automatic price increase at the end. And since many people don’t switch providers when they are out of contract, they are missing out on the savings.

This is an added frustration to the UK consumer – last year it was estimated that more than half of all users are getting a raw deal from their supplier, according to research from consumer group Which?

However, faced with the prospect of swapping routers, changing passwords and – if broadband is bundled with TV – possibly losing a backlog of favourite programmes, many are reticent to switch their broadband provider.

Why pay more?

Broadband contracts are typically offered on periods of 12, 18 or 24 months, during which users cannot leave or face a termination charge. At the end of this period, they are no longer tied to the existing deal and can leave and go to another provider, possibly for a better deal. Ofcom estimates that there are 10 million people who are on deals where there is an automatic price increase at the end. However, most providers do not remind people that their contracts are up, meaning that they roll on on a monthly basis with the possibility of an increased price or a change to the parts of the deal.

It is estimated that between 30% and 50% of the broadband market is “sleeping” – which means they are out of contract but have not switched – according to Andrew Peat from ctrlio, a website that compares tariffsaccording to use.

Customers who have a package with landline and broadband pay an average of 20% more when they are out of contract, showing that the best deals are often offered to new subscribers or those who haggle when their term ends, Ofcom says.