Instant fines for poor broadband service looming

There was hope for a new era of radically improved telecom service today when Ofcom threatened the industry with automatic compensation payments after failing customers.

The watchdog says 5.7 million customers each year need an engineer to fix a landline or internet connection — and that on 250,000 occasions the engineer won’t turn up.

It is proposing that Sky, BT and Virgin Media and other players such as TalkTalk be forced to make a cash payment or bill credit immediately this happens.

At present, customers have to go through a lengthy claims process to get a payout. Ofcom reckons that, on average, 2.6 million customers would get £185 million of compensation a year — £71 each.

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.”

Ofcom proposes charges of:

• £10 for each calendar day the service is not repaired;

• £30 each time an engineer fails to turn up for a scheduled appointment, or it is cancelled with less than 24 hours’ notice; and

• £6 for each calendar day of delay at the start of a new service, including the missed start date.

The industry earlier proposed its own voluntary code of practice for when it fails to turn up to appointments. Ofcom said: “At this stage, we do not consider that this proposal sufficiently meets our concerns.”

Richard Neudegg, head of regulation at uSwitch.com, said: “This will firmly place the impetus on providers to keep their word. We shouldn’t pretend the level of compensation proposed — £30 per missed appointment for example — will be enough to make up for missing a day’s work.

"But, even at a modest level of compensation per user, the collective financial burden on providers will increase the pressure to improve service.

"We’re so reliant on broadband that, for many, the prospect of any downtime may be practically unimaginable — especially for the 25% of adults who now work from home part or full-time.”

Earlier this week, Ofcom said it had fined BT-owned Plusnet £880,000 for continuing to charge customers who had cancelled their contract.

Alex Neill of Which? said: “Broadband has become an essential, so it is only right consumers should get compensation when their provider fails to deliver.

"Ofcom now needs to push ahead swiftly with these proposals and ensure that this and other measures help significantly to improve the service which broadband customers receive.”

BT said it is considering its response.