Ofcom launches automatic compensation for broadband faults

10 November 2017 | Natalie Bannerman

Ofcom, the UK communications regulator, has announced plans for customers to be automatically compensated by providers when the service falls short.

Specifically speaking, this new scheme applies to UK broadband and landline customers who experience slow repairs, missed appointments and delayed installations, as a result they will now be automatically credited on their account.

But how much will the compensation be? Well Ofcom is proposing the following:

Ofcom compensation graph

So to recap that’s: £8 a day for repair delays, £25 per missed appointment and £5 a day for delays to new services (conditions apply).

The first companies to sign on the new scheme are: BT, Sky, TalkTalk, Virgin Media and Zen Internet, who between them serve 90% of all landline and broadband customers in the UK. Though Plusnet and EE have also indicated they will join the scheme in the future.

Commenting on the news, a spokesperon for TalkTalk said: "We are pleased that Ofcom has accepted our voluntary proposal for automatic compensation. The new system will make it quicker and easier for customers to be compensated when things go wrong. It’s crucial the whole industry now works together to deliver the changes required." 

Virgin Media says that it welcomes the news particularly without the need for further red tape. A spokesperson for the company said: "We welcome Ofcom’s decision to support this code without the need for further regulation. This is an excellent example of the industry working together to deliver the best outcome for consumers. The new code extends our customers’ ability to hold us to account and get adequate compensation in the unlikely event that our services do not live up to the high standards we always strive to deliver."

Zen Internet, the internet service provider, said: "We are pleased with this announcement. We have always supported auto compensation because it’s simply right that customers should be compensated when they don’t get the service they pay for and when they experience disruption not of their own making, and they shouldn’t have to fight for that compensation. Zen has always compensated its customers fairly and today’s announcement automates that process. This announcement brings the industry into line with other utilities and we have long believed that should be the case."

A BT spokesperson said: "BT has played a leading role in developing a new voluntary industry code of practice for automatic compensation for fixed broadband and landline customers. We had already recognised this as an important issue and we are happy to have helped to form a new set of rules which will mean customers can be certain about when they will automatically receive fair compensation in the event that things go wrong."

As for Sky, Capacity reached out for a statement but no official comment has been given.

Due to the complexities of launching the first ever automatic compensation system significant changes to providers’ billing systems, online accounts and call centres will need to take place, therefore Ofcom has put in place a15-month implementation period before it comes into effect to ensure a smooth introduction. The regulator says it will monitor the scheme and review it a year after implementation to make sure it is working for customers otherwise it will step in.

Lindsey Fussell, Ofcom’s consumer group director, said: "Waiting too long for your landline or broadband to be fixed is frustrating enough, without having to fight for compensation. 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."

In addition to residential customers the new plans are also set to benefit small and medium-sized enterprises (SMEs), as over a third choose to residential landline and broadband services. Despite the fact that many standard business contracts provide compensation for various only 49% of SME’s did not know if they were entitled to compensation when service falls short. Therefore Ofcom is introducing some new rules to ensure SME’s are given clear, detailed information upfront about what service quality to expect and whether they can claim compensation when problems occur.

Ofcom says that the automatic compensation scheme is only one of a number of areas where it is working to protect telecoms customers. The others include: ensuring lower charges for vulnerable landline customers, better information on broadband speeds before entering a contract, detailed information to show customer how different providers perform and fining companies for poor behaviour.

Topics: Ofcom, BT, Sky, Zen Internet, Talk Talk, Virgin Media, Lindsey Fussell, Broadband, Telephone