Broad­band cus­tomers pun­ished for their loy­alty, says Which?

The Guardian - - FINANCIAL - Miles Brig­nall

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.

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