Sticking with your broadband provider costs an average of £230 a year, research shows
- Four out of five families are paying over the odds for broadband, research shows
- Customers who stick with the same broadband provider pay a loyalty penalty
- Watchdog vows to investigate why loyal customers are overcharged for bills
Failing to shop around for the best broadband deals costs loyal customers an average of £230 a year, research shows.
This ‘loyalty penalty’ is costing households an estimated £3.94billion a year in total.
Around four out of five families are paying over the odds according to figures from the Is My Bill Fair website.
The watchdog is also investigating the loyalty rip-off over concerns that insurance firms ramp up prices at renewal each year, costing families hundreds of pounds [File photo]
Its analysis of 30,000 bills found that the average customer remains loyal to the same provider for seven years.
The research has now been handed to the Competition and Markets Authority (CMA), which is investigating concerns that customers are routinely overcharged if they fail to shop around.
It followed a ‘super-complaint’ by Citizens Advice in September, which claimed that loyal households were being overcharged by £4.1billion a year in total on their bills including energy, mobile and mortgages.
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The average loyalty penalty was £877 a year, including £113 on broadband, it said.
But Alex Perrin, of Is My Bill Fair, warned that the Citizens Advice figures were ‘just the tip of the iceberg’.
‘By analysing real data from tens of thousands of real bills, we’ve demonstrated to the CMA that the actual scale of the problem is far bigger than initially reported,’ he said.
The watchdog is also investigating the loyalty rip-off over concerns that insurance firms ramp up prices at renewal each year, costing families hundreds of pounds.
Failing to shop around for the best broadband deals costs loyal customers an average of £230 a year, research shows [File photo]
Gillian Guy, chief executive of Citizens Advice, said: ‘No one should be penalised for their loyalty. It’s clear the industry needs more scrutiny which is why the Government should set up an independent champion for consumers as is the case in other essential markets.’
A spokesman for the CMA said: ‘We are carefully considering the concerns raised by Citizens Advice in the super-complaint.
‘There are five key markets being investigated, including broadband.
‘Our response will set out our recommendations on this important issue and any next steps we think are needed to make sure businesses don’t take unfair advantage of their long-standing customers.’
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