EE and Virgin Media have been fined £13.3 million by Ofcom for overcharging customers who wanted to leave their contracts early.
After an investigation into early-exit fees, the regulator ruled that the two providers had left nearly half a million customers out of pocket by billing them too much for attempting to leave their deals before they'd expired. They also failed to make properly clear how much people would have to pay to leave.
Ofcom rules allow broadband providers to charge customers who want to leave their deals before their agreed minimum contract length has ended. However, the rules stipulate that:
providers must make it clear exactly how much early leavers will be charged to exit their deals in a "clear, comprehensive, and accessible form"
you mustn’t be charged for any saving that the provider makes from not actually having to supply you the service for the rest of your contract
the charges cannot be so high that they discourage users from switching providers
EE has been fined £6.3 million. Over a six year period, around 400,000 EE mobile and broadband customers were overcharged to the tune of £4.3 million. This happened because EE calculated its exit fees based on the full price of a deal, rather than the discounted price customers were actually paying.
The company has refunded £2.7 million to customers it has been able to identify. Ofcom says a further £1.6 million is yet to be returned. As a result of the investigation, EE says it will conduct a thorough review of its systems in order to fully comply with the rules in future. Contact EE if you think you might have been affected by this.
Virgin Media has been fined £7 million. For almost a year, Virgin charged exit fees that were higher than their customers had agreed to when they signed their contracts. As a result, almost 82,000 people were overcharged nearly £2.8 million. This averages out at £34 per person, although some 6,800 paid over £100 more than they should have.
Virgin Media says it has refunded or made donations for 99.8% of affected customers, and will make further charity donations if they can't track down the rest. The company has now reduced its early-exit charges by an average of 30 percent, and applied an extra reduction to the charges paid by customers who have to end their deals after moving house. However, the company also says it will appeal the fine, describing it as "excessive".
Gaucho Rasmussen, Ofcom’s Director of Investigations and Enforcement, said: "EE and Virgin Media broke our rules by overcharging people who ended their contracts early. Those people were left out of pocket, and the charges amounted to millions of pounds. That is unacceptable. These fines send a clear message to all phone and broadband firms that they must play by the rules, in the interests of their customers."
Loyal customers who stick with their broadband provider end up paying on average 43% more than if they had switched.
Research by Citizens Advice has cast a light on the way the major providers hike their prices once a contract has ended. Customers who choose to keep their existing deal instead of shopping around find themselves paying an average of £113 extra each year in what has been dubbed a "loyalty penalty".
Citizens Advice analysed the cheapest broadband deals from the UK's five largest suppliers. They found that Virgin Media was the only one that did not bump its prices at the end of the initial contract period. The other four saw increases of as much as 67%.
BT - the price rises from £24.49 to £40.99 after 12 months. An increase of 67%, amounting to £198 per year.
TalkTalk - the price goes from £20 to £25.50 after 24 months. An increase of 28%, or £66 per year.
Sky - after 12 months the price rises from £18.99 to £28.99. An increase of 53%, or £120 per year.
EE - the price rises from £21 to £28.50 after 18 months. An increase of 36%, amounting to £90 extra per year.
Virgin Media - the cheapest deal is £32.25 per month for 12 months. The price doesn't rise at the end of the contract.
The report found that more than a third of customers didn't realise that prices could go up once their contract had ended. It also found that customers stay on the same deal for an average of four years, which ends up costing them as much as £594 extra.
Those over 65 or on lower incomes were significantly more likely to stick with a deal for more 10 years.
Time to switch
The study highlights the fact that it's more important than ever to shop around for the best broadband deal. Our Ofcom-approved price comparison service helps you find the best and cheapest packages available for your postcode.
Switching broadband providers is easier than you might expect. In most cases, your new provider will handle all aspects of the switchover. You should experience no loss of service, and you won't even need to inform your old supplier that you're leaving. Read our guide to switching broadband providers to see how the process works.
Citizens Advice is calling for greater clarity in how providers advertise their services, and also to inform customers by text when the fixed price comes to an end.
Gillian Guy, chief executive of Citizens Advice, said, “People often choose their broadband deals based on the price that works for them - but our evidence shows that many do not realise the price will rise after the end of the fixed deal. The government has rightly put energy firms on warning for how they treat loyal customers - the actions of broadband firms warrant similar scrutiny. Extra protections for vulnerable consumers are also a must.”
The moral of the story is clear: loyalty doesn't pay. Once your contract is up, find a new provider. There are some incredible deals to be had on both standard and fibre broadband, and if you're lucky you might even bag an awesome free gift at the same time.
But that's a way off. In the meantime there are steps you can take to ensure you achieve speeds closer to what you were expecting.
You may not know that your Wi-Fi router can have a massive impact on the internet speeds you get throughout your home. Since the provider supplies the router we tend to assume that they're automatically good enough. But that isn't always true - sometimes they're old or slow, and not capable of handling a superfast broadband connection.
In these cases, upgrading to a more powerful router can help speed up your broadband dramatically.
How a new Wi-Fi router can help
Let's start with the technical bit.
The performance of a router is determined by the wireless standard that it uses. The best modern routers use the latest standard, called 802.11ac. It's the fastest available, and it runs on the 5GHz band which is clean and interference free.
802.11ac superceded the 802.11n standard. This is much slower - perhaps half or even a third of the speed - and it commonly runs on the 2.4GHz band which is much more prone to interference from other electrical devices in your home. As a result, the signal is not just slower but it gets much weaker the further it travels.
The router as a bottleneck
Many broadband providers supply an N-rated router with their packages, and it may not be up to the job. Tests show that 802.11n routers have a real world top speed of 50-100Mb, at close range. At a distance of 20 metres, and with a few obstacles like walls and floors in the way, that speed can be slashed in half - or worse.
So, if you've got a high-end fibre package and are getting speeds of 50Mb or more, then an N-rated router simply won't cut it. Your broadband is faster than your router, and the router becomes a bottleneck. Even on an entry-level fibre deal, with speeds of 25Mb, you'll be pushing it. You might find you get good speeds downstairs, but that they fall off sharply in the bedrooms.
In both cases, upgrading to an AC-rated router is likely to give you a major speed boost. The exception is standard broadband. Here, the speeds top out at 16Mb, and in practice are usually somewhat slower. An N-rated router should be able to handle this.
An easy way to check if you're affected is to use our free Speed Test tool. Stand next to your router and run the test on your laptop. Then head to the furthest corner of your house and run it again. If there's a major discrepancy in your results then it could be a sign that you need to upgrade your router. (Or it could mean you need to find a better position for your router.)
Do you need a new router?
You can see why a slow router can mean you don't get the broadband speeds you were expecting. So do you need to upgrade?
When you're shopping for broadband deals, all our comparison tables have icons to show what kind of router you're getting. Click the More Info button to see whether there's an option to upgrade to a better router when you sign up.
What router do you get?
Many of the major providers now supply AC-rated routers with all their packages. This includes TalkTalk, Vodafone and Virgin, while Sky also provides the new Sky Q Hub if you are a TV customer.
BT, Plusnet and EE supply 802.11ac routers with their fibre packages, and N-rated routers with standard broadband. BT offers a paid upgrade for standard broadband customers, but the other two don't.
Origin customers get an N-rated router, and need to pay at checkout to upgrade to a faster AC-rated unit.
If you've been with a provider for some time it's possible you're still using an older N-rated router and aren't getting the fastest possible speeds from your broadband. In this case it's worth checking with the provider to see if they'll swap your router for a newer model for free. Some may give you one in exchange for you signing a new contract. Just make sure you know exactly what you're getting, and that you aren't charged or placed on a new contract without knowing.
Lastly, a handful of providers, including Plusnet, Zen and Origin, allow you to use own router, so you can shop around and check independent reviews to get the best model for your needs.
The router is a frequently overlooked part of the broadband service. It's natural to assume that broadband problems are the fault of the provider, but the reality is that if your router is too slow you can easily be cutting your internet speed in half without even realising.
Give your router a quick check now to see if you would benefit from an upgrade.
Good broadband is one of the essentials of student life. You need it for coursework and research; you need it for Game of Thrones and pulling an all-nighter on Call of Duty. But with so many broadband packages to choose from, how do you decide which to go with? What factors do you need to be aware of, and where can you find the best student broadband deals? Let's take a look.
When searching for broadband for your student accommodation you don't just need the best deal, you need the right deal. It's important to get the right length of contract - if you finish uni next June you don't want to still be paying for your broadband in August - and you also need to think about what speeds you need. A student house with two people will have vastly different internet requirements to a house with eight people.
Our newly updated Guide to Student Broadband can help you with this. It's got all the advice you need, and will also point you towards the best offers around.
Top student broadband offers 2016
Fortunately, many providers offer exclusive deals for students. They come with nine month contracts - to cover you during term time and no more - and include superfast fibre broadband options. Here's our pick of some of this year's best student offers.
Virgin Media VIVD 200 for Students: for the largest or most demanding households you can get up to 200Mb fibre broadband (so long as you're in a coverage area). Cheaper 50 and 100Mb packages are also available.
Origin Broadband: Origin's basic broadband service isn't a student special, but it is one of the cheapest deals around. Get 12 months of internet access for free, paying only line rental.
NOW TV Fab Fibre with TV pass and Calls: NOW TV offers up to 38Mb fibre broadband with no contract - you can cancel at any time. You get a TV pass, too, with your choices being Entertainment, Sky Cinema or Sky Sports.
Check out our Guide to Student Broadband for the lowdown on all these deals and many more, plus answers to any other questions you might have. Keen video gamer? Want to watch Premier League football? Need mobile broadband on your laptop? That's all covered, too!
Each month hundreds of thousands of broadband customers test their speeds with our broadband speed test. Since the end of 2015 there's been little change in average speeds from home broadband with average download speeds for March 2016 coming in at 20.41Mb and average upload speeds at 3.73Mb.
However, our test also supports users testing on tablets and smartphones, meaning we can report on mobile broadband speeds from 4G and 3G networks. While home broadband has been stable, mobile broadband average download speed has risen by a full 2Mb since December and upload speed by 1.6Mb, the average mobile broadband speeds for March 2016 were 15.31Mb download and 3.71Mb upload.
When the big mobile broadband and home broadband providers' average speeds compete on the same table, it's only Virgin Media's DOCSIS 3 cable broadband that outperforms mobile broadband, clocking in 46.95Mb, with upload speeds at 5.9Mb.4GEE is ahead of BT Broadband with download speeds clocking in at 18.71Mb, faster than BTby 1.07Mb. 4GEE and Vodafonemobile broadband sit in overall 2nd and 4th places beating all home big broadband providers' averages bar Virgin Media, with Vodafone's 16.26Mb average mobile download speed only 1.38Mb behind BT.
Of the home broadband providers Post Office Broadband still has the UK's slowest broadband speed overall with only 4.38Mb average downloads and 1.67Mb average uploads, well below the average speeds expected for copper phoneline broadband. Three tested with the slowest mobile broadband at 12.09Mb downloads, but this still beat home broadband offerings from Sky and EE.
When the supplementary broadband providers table (see page 4 of the report) is included we can see that fibre to the building provider Hyperoptic tested as the fastest broadband overall with 91.7Mb average downloads and 77.3Mb uploads.
December 2015 saw average download speeds for fixed line providers recorded by users of our broadband speed test remain stable in comparison to the results from November, coming in at 20.56Mb. Average upload speeds saw a 0.15Mb drop to 3.68Mb.
Of the big 5 home broadband providers, Virgin Media remained in first place but their average download speeds appear to have levelled out since rolling out their 200Mb service, remaining stable at 46.57Mb, with upload speeds at 5.66Mb. BT Broadband retain second place with average download and upload speeds steady at 17.58Mb and 4.42Mb respectively. TalkTalk move up to third place, with download speeds stable at 12.8Mb and upload speeds dropping by 0.21Mb to 1.86Mb. Plusnet drop into fourth place, dropping by 0.59Mb to 12.6Mb for average download speeds with a 0.39Mb decrease to 2.85Mb for average upload speeds. Finally, Sky remain in fifth place with a 1.1Mb fall in download speeds to 10.92Mb, while their upload speeds decreased by 0.41Mb to 2.47Mb.
Results from users testing with mobile-enabled devices including phones and tablets suggests that mobile broadband speeds saw an overall rise since November. Taking mobile broadband separately from home broadband, EE Mobile retain first place, with download speeds increasing by 1.1Mb to 17.55Mb and upload speeds holding at 3.87Mb. Vodafone are in second place, seeing download speeds fall slightly by 0.19Mb to 13.76Mb and upload speeds steady at 2.82Mb. O2 are in third place with download speeds at 11.78Mb - a respectable 1.4Mb increase over last month - and upload speeds at 2.53Mb. Three are still in fourth place, with average download speeds of 9.84Mb and upload speeds of 2.56Mb.
When mobile broadband and home broadband average speeds compete on the same table, 4GEE is head-to-head with BT's second place with a difference of only 0.03Mb. 4GEE and Vodafone mobile broadband sit in overall 3rd and 4th places beating all home broadband providers' averages bar Virgin Media and BT. This suggests that 4G broadband may have higher uptake levels relative to 3G compared to uptake of the fastest possible fibre broadband products relative to cheaper options.
This month's supplementary broadband providers table (see page 4 of the report) found Post Office Broadband had the UK's slowest broadband speed overall with only 2.55Mb average downloads and only 0.33Mb average uploads. Hyperoptic was fastest overall with 102.1Mb average downloads and 92.13Mb uploads.
October 2015 saw average download speeds for fixed line providers recorded by users of our broadband speed test rise by 2.76Mb in comparison to the results from September, coming in at 21.88Mb. Average upload speeds saw a 0.4Mb increase to 4.65Mb.
Virgin Media's average download speeds rose by 6.31Mb to 48.66Mb, with upload speeds also improving to 6.64Mb. Virgin have recently begun rolling out their 200Mb service for new and existing customers, which accounts for the significant increase in download speeds.
BT Broadband retain second place with average download speeds increasing by 1.32Mb to 18.84Mb, and upload speeds increasing by 0.45Mb to 5.59Mb. Plusnet hold third place, remaining stable at 15.09Mb for average download speeds with only a 0.33Mb decrease to 4.25Mb for average upload speeds. TalkTalk stay in fourth place, with download speeds at 12.89Mb and upload speeds at 2.32Mb. Finally, Sky are in fifth place with a 0.87Mb rise in download speeds, putting them at 12.76Mb, while their upload speeds increased by 0.38Mb to 3.64Mb.
With the recent improvements to our speed test, we're now able to record results from mobile users on their phones and tablets. EE Mobile are in first place, with download speeds averaging at 17.81Mb and upload speeds at 5.36Mb. Vodafone are in second place, with download speeds at 12.95Mb and upload speeds at 3.79Mb. O2 are in third place with download and upload speeds at 11.03Mb and 3.81Mb respectively. This leaves Three in fourth place, with average download speeds of 9.03Mb and upload speeds of 3.45Mb.
Virgin Media were already the fastest of the big broadband providers, but since the 1st of October they've become even faster! With the introduction of the new hybrid fibre-coaxial VIVID packages, Virgin Media customers can enjoy download speeds of up to 200Mb!
The speed difference compared to fibre-to-the-cabinet competitors is thanks to Virgin Media's DOCSIS 3 technology. Their insulated coaxial cable houses a thicker copper core and is run directly into your home. This means that there's much less signal loss than there is over the copper phone lines used by most fibre broadband providers, so the speeds you can get are much faster and you won't experience slowdowns with distance from Virgin's street cabinets. The launch of VIVID sees tweaks to the protocol and technology used to get even more speed out of Virgin's existing hybrid fibre-coaxial network.
Interested? Why not use our postcode checker to see if you can get Virgin Media in your area, then check out the following better than half price deals!
Want to add a Virgin Media TV package, currently reduced in price for 9 months? VIVID Big Bundles start from only £19.99 a month. The Big Bang package comes with 130+ channels and VIVID 100. If you want the faster VIVID 200 speeds, then the Big Kahuna bundles come with over 230 channels, while the Big Daddy has over 260!
Existing customers can also benefit from the faster speeds with the option to opt into a speed increase rolling out between the 1st of October and June 2016, with 90% of customers expected to have the option available by the end of 2015. Customers on slower speed tiers are also expected to see a boost in upload speeds.
Broadband discount offers for new customers only. Time limited introductory offers. Products only available in Virgin Media cabled streets - use our postcode checker to find out if this is available in your area. £49.95 set-up fee applies to standalone broadband packages. Line rental required for phone and TV bundles at £16.99 a month, or £164 for a year up front.
March 2015 saw average download speeds recorded by users of our Broadband Speed Test drop slightly by 0.32Mb in comparison to the results from February, coming in at 21.11Mb. Average upload speeds remained stable at 4.22Mb.
Virgin Media's average download speeds dropped by a further 1.29Mb to 39.69Mb, with upload speeds remaining stable at 5.34Mb. BT Broadband hold second place with average download and upload speeds remaining stable at 19.85Mb and 5.81Mb. Plusnet remain in third place, with download speeds taking a 1.15Mb hit down to 14.59Mb with a 0.29Mb increase to 5.08Mb for average upload speeds. TalkTalk stay in fourth place, with download speeds increasing by 0.78Mb to 14.26Mb and upload speeds holding stable at 1.76Mb. Finally, Sky are in fifth place with a 0.57Mb decrease to download speeds, putting them at 12.8Mb, with upload speeds falling slightly to 3.24Mb.
February 2015 saw average download speeds recorded by users of our Broadband Speed Test drop by 0.48Mb in comparison to the results from January, coming in at 21.43Mb. Average upload speeds saw a 0.23Mb increase to 4.32Mb.
Virgin Media's average download speeds dropped again by 0.63Mb to 40.98Mb, with upload speeds remaining stable at 5.5Mb. BT Broadband remain second place with average download speeds dropping by 0.53Mb to 19.87Mb, though upload speeds increased by 0.29Mb to 5.97Mb. Plusnet hold third place, remaining stable at 15.74Mb for average download speeds with a 0.38Mb increase to 4.78Mb for average upload speeds. TalkTalk are also stable in fourth place, with download speeds at 13.22Mb and upload speeds at 1.75Mb. Finally, Sky are in fifth place with a strong 1.34Mb increase to download speeds, putting them at 13.37Mb, with upload speeds increased by 0.49Mb to 3.44Mb.