Broadband customers punished for their loyalty, says Which?
Broadband customers who fail to shop around when their contract ends or haggle for a better deal from suppliers are overpaying by up to £220 a year.
Analysis by Which? found BT’s broadband customers were paying the biggest loyalty premium. Only one firm, Utility Warehouse, offered loyal customers the best deals, it said.
Which? asked consumers how much they paid for their broadband, whether they had haggled for a new deal in the past 12 months, and what they had saved. It then compared the results to the cheapest deals offered to new customers.
Which? found 72% of the broadband customers it questioned had been with their provider for more than two years, and many were overpaying as a result.
Broadband providers advertise cheap introductory deals to entice new customers – usually for 18 to 24 months – in the hope they will remain customers but they then subsequently pay the higher levied monthly charge.
The average annual broadband bill paid by loyal BT customers was £540 a year, compared with £372 for customers who haggled, or the £320 paid by a new customer.
Virgin Media had the second-largest loyalty premium. Virgin customers who pushed for a better deal paid an average of £384 a year, saving £156.
New TalkTalk customers paid £240, which was £85 less than the £324 paid by loyal customers. Those who haggled at their contract’s end saved just a few pounds, paying £318, Which? said.
Only Utility Warehouse offered its best tariffs to loyal customers. A new customer signing up for its cheapest deal would be paying £25 more a year than an existing one, it found.
Alex Neill, managing director at Which?, said switching providers was the best way to get a good-value tariff.
“Broadband customers will be appalled that not only could they be paying through the nose simply for being loyal to their provider but that they could, in some cases, also get a much faster internet connection for a fraction of the price that they are currently paying,” he said.