In a move condemned by Citizens Advice, a group of internet providers are attempting to block Ofcom’s proposed broadband compensation scheme. Our research estimates that this would result in consumers losing out on at least £52 million in compensation.

Earlier this year, Ofcom proposed an automatic compensation for individuals who have faced poor service with their broadband or landline services. The watchdog highlighted that by automating the compensation process, customers would no longer have to face an arduous claims procedure.

However, a number of telecoms companies (including Virgin, Sky and BT) rejected Ofcom’s plans of mandatory compensation, instead designing their own scheme which relies on the consumer actively seeking reimbursement.  The corporate-devised scheme offers significantly less minimum compensation than that outlined in Ofcom’s framework; the following table outlines some of the major differences:

 

Loss of service

Delayed installation

Missed appointment

Proposed industry payment (June 2017)

£7 per calendar day for loss of service beyond two working days

£4 per calendar day (only payable automatically if customer subsequently activates)

£20 for a missed
appointment slot or cancellation with less than 24 hours

Ofcom payment

£10 per calendar day beyond two working days after the provider becomes
aware of the loss

£6 per calendar day beyond the date that the provider has committed to in a written form

£30 for a missed
or cancellation with less than 24 hours

 

Our research indicates that the scheme proposed by the industry leaders would ultimately pay out at least £52 million less in compensation, 32% less than Ofcom’s outlined compensation process.

Gillian Guy, chief executive of Citizens Advice emphasized the need for Ofcom’s original proposed scheme, stating: “the regulator must hold its ground and introduce a compulsory automatic compensation scheme that clearly lays out how much consumers are entitled to when they get poor service, with the amount providers have to pay reflecting as closely as possible the detriment faced by consumers.”