Automatic Compensation for Broadband Faults to Rise with Inflation

The payouts broadband and landline providers must make to customers for outages and service delays will rise in line with inflation, Ofcom has said.

The automatic compensation scheme launched 1 April 2019. Participating ISPs automatically pay customers, in either cash and bill credit, for common failings. 

The rates were originally set by the telecoms regulator at £8 per day of an outage, starting from the third day, and £5 per day a new service is delayed. Appointments that are cancelled with less than 24 hours notice or to which an engineer arrives late attract compensation of £25.

Ofcom has now updated the scheme’s terms and conditions to provide for annual increases in these payouts in line with the rate of inflation. From this year onwards, payments will increase from 1 April each year in line with the Consumer Price Index (CPI) on 31 October the previous year.

The CPI on 31 October 2020 was 0.9%. This means that from last Thursday, ISPs must pay customers £8.07 for every day a service is out beyond the first two days, and £5.04 for every day a service is delayed in starting. The payout for missed appointments will rise to £25.23.

However, participation in the scheme remains voluntary. The four largest broadband providers—BT, Sky, TalkTalk and Virgin Media—all participate, as do full-fibre ISP Hyperoptic, NOW Broadband and Zen Internet. But several major ISPs haven’t signed on, leaving millions of households with a guarantee of compensation if their broadband goes down.

EE, Plusnet and Vodafone have all dragged their feet in joining, while KCOM and SSE have given no indications yet they intend to sign on. 

Vodafone, with 876,000 broadband customers, initially pledged to join by the end of 2019 but still hasn’t come on board.

EE set a timeline of last summer but hasn’t joined, while Plusnet originally pledged to join “as soon as possible”—a soon that hasn’t yet arrived. This is despite both provider’s parents company BT being an original signatory.

When queried, some of the non-participants expressed that they intended to join once the disruption from the coronavirus crisis ended. And indeed, Ofcom paused the compensation scheme last April as social distancing restrictions limited home repairs. However, nearly all participants had resumed payouts for some faults by June.

Ofcom has already hailed the scheme as a success. Between July and December 2019, ISPs issued £20.7 million in compensation, more than double the £8 million providers paid in the six months before the scheme began.