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ISPs to pay automatic compensation for broadband faults

Telecoms regulator Ofcom says its plan, which would cover slow repairs and missed appointments, could see consumers in line for a payout of up to £185m every year

Consumers will be entitled to automatic compensation for delayed repairs to a faulty broadband service, missed engineer appointments and delays to the start of a new service, if new plans tabled by telecoms regulator Ofcom get the go-ahead.

The regulator is proposing a number of changes designed to enhance telecoms service quality for users, and wants to require internet service providers (ISPs) to pay out automatically, either in cash or through credits to customer bills, to victims of bad service.

This would mean consumers would be spared the prospect of having to go through an often lengthy and difficult claims process with their ISP.

Ofcom consumer group director Lindsey Fussell predicted that the plans could mean up to 2.6 million people would receive up to £185m in new compensation payments every year.

“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,” she said.

“So 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,” said Fussell.

Automatic compensation will be set at £10 per day for each day after two full working days that an outage is not fixed; at £30 for each time an engineer fails to meet a scheduled appointment or cancels with under a day’s notice; and at £6 per day for each day after a new provider fails to activate a new service.

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These proposals will only apply to broadband and landline telephone services because the regulator has judged that mobile network operators are more inclined to pay out compensation of their own accord, and it is very rare for mobile services to be down for over a day.

Ofcom estimates 5.7 million consumers experience a loss of landline or broadband service every year, while engineers miss around 250,000 appointments, and one in eight installations are subject to delay.

It criticised ISPs for offering compensation only on an ad hoc basis to a minority of those having problems – generally those who are motivated enough to complain – and failing to adequately represent the harm that these problems can cause.

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.

Consumer advocates were quick to welcome the news. Richard Neudegg, head of regulation at Uswitch.com, said the proposals might provide a much-needed impetus for ISPs to up their game around customer services.

“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,” he said.

Hannah Maundrell, editor in chief at comparison site Money.co.uk, also welcomed Ofcom’s proposals, saying the issue needed to be forced because too many consumers are unwilling to follow through with complaints.

However, she added, “Ofcom must take measures to prevent suppliers hiking prices even further to offset the cost of this extra compensation”.

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