Ofcom toughens up industry code of practice, which will benefit subscribers who are not getting the minimum speed promised when they signed up.
Consumers whose broadband speed doesn’t match what they signed up to will soon be able to ditch their provider at any point during a contract, under rules announced by the communications watchdog.
Sharon White, the new chief executive of Ofcom, said she wanted to toughen the industry code of practice to allow subscribers to switch provider if they were not getting the minimum speed they were promised when they signed up.
Under the current code, frustrated households can only exit their broadband contract in the first three months if the minimum promised speed is not delivered. With deals often lasting 18 months, households can find themselves stuck with slow internet speeds for more than a year, or paying hundreds of pounds in exit fees.
Ofcom’s change is unlikely to come into force until January 2016 – the point at which the telecoms firm must have adopted Ofcom’s new code of practice on the subject. For technical reasons the right to cancel does not include Virgin Media, although Ofcom said the cable firm has agreed to act “according to the spirit of the code and will treat customers fairly”.
The new measure is one of several designed to increase the rate of switching in the broadband market, so consumers can benefit more from competition between BT, Sky, TalkTalk and Virgin Media. Vodafone also made a bid to join the broadband big four on Wednesday by launching its own packages.
The regulator has also put in place a new switching process that will mean a household’s new chosen broadband provider will be able to demand the necessary technical information from their old one. Under the current system subscribers often have to ask their telecoms operator for the relevant details and then pass them on. Those new rules come into force on 20 June 2015.
In a speech at a conference held by the consumer lobby group Which?, White said: “This will make a real difference for consumers and will encourage more people to take full advantage of competition in the sector.
“Access to a reliable internet connection and mobile phone is essential to the functioning of the economy, to the way people work and live their lives.”
Gillian Guy, chief executive of charity Citizens Advice, welcomed the intervention.
“Hidden charges and unfair penalties are all too common for mobile phone and broadband consumers and customers have been hit by sky-high exit fees despite getting bad service,” she said.
“We have found some people can face up to £625 to get out of a broadband contract and £800 to exit a mobile phone deal. It is good to see Ofcom taking a stronger stance against the companies acting unfairly and hopefully this will start to make the market better customers.”