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Automatic pay-outs for web and phone problems planned by Ofcom

Landline and broadband customers will receive automatic compensation for delays in repairs, service set-up or missed appointments under proposals from Ofcom.

The plans would result in up to 2.6 million customers receiving an additional £185m in compensation each year, the regulator said.

Customers would receive cash payment or credit on a bill - under a scale set by Ofcom - without having to go through a lengthy claims process, under the plans.

Ofcom's analysis showed that each year 5.7 million consumers experience a loss of landline or broadband service while engineers fail to turn up for 250,000 appointments.

Meanwhile, one in eight landline and broadband installations are delayed, affecting more than 1.3 million people.

Ofcom said compensation was currently only given to a minority of those suffering problems and can fail to reflect adequately the harm caused.

Lindsey Fussell, Ofcom's consumer group director, said: "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.

"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 will mean customers are properly compensated, while providers will want to work harder to improve their service."

Under the planned scale of pay-outs, customers would be entitled to compensation of £10 a day if after two days service had stopped working and not been fully fixed.

If an engineer does not turn up for a scheduled appointment or it is cancelled with less than 24 hours' notice, there would be a £30 pay-out.

When a provider promises to start a new service on a particular date but fails to do so, a customer would be able to expect £6 a day in compensation, including the missed start date.

Ofcom said the proposals would apply only to fixed broadband and landline telephone services.

Analysis suggested that mobile providers already made significant compensation payments and that less than 1% of mobile customers lose service for more than 24 hours.

A consultation on the plans is open until 5 June and a decision will be published around the end of the year, Ofcom said.