Cancellation fees “punishment” for switching broadband suppliers

People who stand up to costly broadband cancellation charges are seeing their fees passed to debt collectors, finds Citizens Advice and Citizens Advice Scotland.

New evidence from the Citizens Advice service reveals some people are finding themselves locked into unsuitable broadband contracts or hit by arbitrary cancellation fees when they switch to get a better service. The charity found the average cost was £190 for getting out of a broadband contract, with fees up to £625 reported, in cases from the first six months of the year where cancellation fees were recorded.   

Snail’s pace connection speeds, persistent faults and bad customer service were among other gripes consumers complained about over the last year. Over half of problems reported to the Citizens Advice consumer service were for substandard service.

Those moving house were sometimes hit by the early cancellation fees, despite the fact that they wouldn’t be able use the service after they moved.

The cases analysed were taken from over 3,300 internet and broadband problems reported to Citizens Advice Bureaux in England and Wales and over 4,500 issues highlighted to the consumer service across England, Scotland and Wales from July 2013 to June 2014.

Of the 3,300 internet and broadband problems handled by Citizens Advice Bureaux in England and Wales, the top three reported issues are:

• 1 in 5 problems (23%) are about cancellation and withdrawal
• 18 per cent of problems are to do with complaints and redress
• 15 per cent of problems concern costs, billing or payment.

Citizens Advice is calling for internet service providers to never issue cancellation fees if customers have been having persistent problems with their service, so that people aren’t being forced to stay in unsatisfactory contracts. Providers also need to improve their customer service, and must be a lot more careful handing cancellation fees over to debt collectors.

Gillian Guy, Chief Executive of Citizens Advice, said:

“People are finding themselves held captive by bad broadband services. Some consumers who have stood up to problem suppliers have found themselves being punished for switching when they’ve been hit with a cancellation fee that is then passed over to a debt collection agency.

“Internet service providers must not shackle customers seeking a better service with unreasonable fees that can turn into shock debt. All internet users need to be able to easily have a way out of inadequate contracts and broadband speeds that only give them daily frustration.”

Margaret Lynch, Chief Executive of Citizens Advice Scotland, said:

“We want to see a fairer country where people as citizens and consumers are empowered and have their rights respected. Arbitrary fees locking people into contracts that don’t work for them in are a step in the wrong direction. Any consumer facing these sorts of fees should let us know by calling our consumer helpline on 03454 04 05 06.”   

More people are now accessing online help from Citizens Advice around internet, phones, television and computers, up 83% from July 2013 to June 2014.

Bad broadband problems reported to Citizens Advice

• One woman was hit by a cancellation fee even though it wasn’t in the terms and conditions of her contract. She had tried to switch provider after the broadband speed was so bad that she was paying repeatedly to use an internet café.
• One broadband user in his 70s saw his service stop working altogether after months of problems. When he changed provider he was sent a letter saying that he owed over £200 for early cancellation, which was then handed over to a debt collection agency.
• One client from Southampton kept being sent bills for months after he had transferred to a new provider. The first company denied his contract with them had ever been cancelled and they had instead put him on a rolling contract.
• One client moved home and was not told she would be put on a new contract at after she moved, instead of just having her old contract moved over. The supplier insisted she was tied into a new 18 month contract when she called to say she didn’t want to continue with them.  She soon found herself owing over £170 that she worried debt collection penalties could be added to.
• One man from Lancashire was offered faster fibre optic broadband by his internet provider but was later reverted back to his old service when the installation gave him big problems. He decided to switch to another provider to get faster internet but was then harassed by his original provider over an early cancellation charge.

Notes to editors:

1. Citizens Advice Bureaux in England and Wales helped with over 3,317 internet and broadband issues in July 2013 to June 2014. The Citizens Advice consumer service helped with 4,551 issues with Internet Service Providers (ISPs) across England, Scotland and Wales.
2. The average cost of cancellation fees was derived from an analysis of 76 cases of Internet Service Provider problems that involved cancellation fees, reported to the Citizens Advice consumer service
3. This year the Citizens Advice service celebrates its 75th anniversary. We’ve planned a year of activity running from January to December 2014. Contact the press office on 03000 231 080, or via email at press.office@citizensadvice.org.uk, to find out more.
4. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
5. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
6. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
7. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
8. Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 6.6 million problems from April 2012 to March 2013. For full 2012/2013 service statistics see our quarterly publication Advice trends.
9. Citizens Advice service staff are supported by more than 22,000 trained volunteers, working at over 3,000 service outlets across England and Wales.