Ofcom and broadband providers agree model for automatic compensation when something goes wrong
Ofcom and most of the UK’s major broadband providers have settled on a structure for automatic compensation payments for service problems.
Under the current system, customers must apply for compensation in what can be a potentially difficult and lengthy process and only 15 percent of incidents are paid out on.
With 7.2 million problems each year, the new rules could see £142 million handed out – around nine times the current level.
Customers will be entitled to £8 a day for delayed repairs after a loss of service, £25 for a missed appointment or a visit that is cancelled with less than 24 hours notice, and £5 a day for a delay to the start of a new service.
BT, Sky, TalkTalk, Virgin Media and Zen Internet have signed up to the plans, representing 90 percent of the UK’s landline and broadband customers. As a sweetener, they will have 15 months to make the necessary changes to call centres, billing systems and online accounts.
The move will benefit small businesses too. A third of SMBs choose residential broadband services but only half knew if they were entitled to compensation. Most dedicated business contracts have specific compensation clauses in place.
“Waiting too long for your landline or broadband to be fixed is frustrating enough, without having to fight for compensation,” said Lindsey Fussell, director of Ofcom’s Consumer Group.
“So providers will have to pay money back automatically, whenever repairs or installations don’t happen on time, or an engineer doesn’t turn up. People will get the money they deserve, while providers will want to work harder to improve their service.”
The plans have been largely welcomed by industry observers but there is a suggestion that the compensation may not be enough to cover the impact of downtime.
“We’re so reliant on broadband that, for many, the prospect of any downtime may be practically unimaginable – especially for the 25 percent of adults who now work from home part or full time,” said Ewan Taylor-Gibson, broadband expert at uSwitch.
“While the level of compensation proposed – £25 per missed appointment for example – might not make up for missing a day’s work, the collective financial burden on providers will increase the pressure to improve service.”