Treating loyal customers fairly

18 December 2018

Like the Panel, Ofcom is concerned that some customers are paying more than others for similar services - and even worse services in some cases - particularly when introductory offers have ended.

Ofcom has begun a review of broadband pricing (PDF 2.5MB, opens in a new window) with a particular focus on vulnerable people, which may include people who are older, on lower incomes, or who have a physical or mental illness.

For example, it estimates that customers who have a bundled landline and broadband service are paying an average of 19% more once their discounted deal has ended.

Ofcom will look at how companies change prices for customers over time, and which customers are most affected by this. Where it sees consumers are being let down, it has promised to act to protect them. Where it finds that price differentials are leading to poor outcomes for consumers in the fixed broadband market, and particularly where those consumers are vulnerable, Ofcom says it will identify appropriate remedies.

These may include measures to promote consumer engagement, such as additional requirements on providers to give consumers information about their services, or greater use of technology to help consumers shop around, such as promoting data sharing with third-party intermediaries to help consumers choose appropriate services. Further measures relating to provider practices, such as further guidance on collecting data on vulnerable consumers, as well as requirements relating to the price of services, may also be considered.

Where Ofcom identifies appropriate remedies and it has the powers to implement them, it expects to consult on them in Q2 of 2019/20 with a statement setting out its final decision by Q4 of 2019/20. If it thinks that further powers would be appropriate to protect consumers, Ofcom says it will seek them.

Ofcom is also reviewing how mobile companies charge their customers for handsets when these are bundled with airtime in a single contract (opens in a new window). That consultation closed in November and it expects to publish its findings on this next year. You can find our response to that consultation here (PDF 131KB, opens in a new window).

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