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Your Money > Household Bills Articles > Beware the broadband...
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By Richard Evans
If you are one of the thousands of people who signed up for TalkTalk's offer of free broadband 18 months ago, you will soon be at liberty to switch to a new supplier when the minimum term expires. But don't change to another network without reading the small print of the new contract carefully - some broadband companies impose some onerous terms. For example, the broadband supplier may restart you on a new one-year contract when it makes technical changes to its network - without offering you a choice or even letting you know. So you might be expecting your contract to expire in, say, six months but find that you are actually tied in for another 12. With the market becoming ever more competitive, switching could mean significant savings, so being tied into a longer contract than the one you originally signed could cost you money. Changes to the suppliers' network that may trigger a new contract include the installation of their own equipment in BT's exchanges and an upgrade to the maximum speed of the network. The practice of prolonging contracts is widespread, according to those in the industry. "There has been a problem with contract extensions - this type of thing is not uncommon," says Gregory Hunt of the Communication & Internet Services Adjudication Scheme (Cisas), the independent dispute resolution service. Jason Lloyd of Moneysupermarket.com, the price comparison website, says: "This is a big problem. Over 55 per cent of customers don't read their contracts, and about three quarters of complaints come about as a result." Broadband companies may want to lengthen a customer's contract when they switch from reselling BT's broadband service to using their own equipment in the local telephone exchange, because this changeover costs them money. But the rules governing the industry say that in such cases involving a "material change" to the contract, the provider must notify customers and give them the opportunity to cancel the service without penalty at the end of their original minimum contract period. "Sometimes, though, the customer does not receive the notification or does not reply for whatever reason," says a spokesman for Ofcom, the communications regulator. "At this point the customer should contact the provider's customer service department and then, if necessary, an alternative dispute resolution scheme." There are two such schemes - Cisas ( www.cisas.org.uk) and Otelo (Office of the Telecommunications Ombudsman; www.otelo.org.uk) - and all broadband suppliers are required to belong to one or the other. Ofcom is investigating the question of additional charges levied by broadband suppliers.Even when you are out of contract and free to switch to another network without financial penalty, there can still be problems. Under Ofcom's rules, broadband companies are required to give customers who want to move to another network an authorisation code called a "Mac". The customer can then pass the Mac on to the new supplier, which will manage the process of transferring the service. The Mac process often works well, say industry sources. However, the situation is complicated and, broadly speaking, problems can arise when the original provider uses BT's network but the new one has its own equipment. Not all types of transfer use Macs and some may result in the loss of your broadband connection for several weeks. Ofcom's advice is that it is usually best to channel all enquiries through your new provider if difficulties arise. Before you do decide to switch, it can be worth seeing what your existing supplier has to offer. "Most of the best deals are not advertised - they are reserved for customers who have threatened to leave," says Mr Lloyd. Alternatively, he says, you may be able to negotiate better terms with a new supplier, such as a shorter contract in exchange for using your old modem. Problems can also arise when you want to move home. If, for example, your current broadband supplier does not cover your new address, it may ask you to pay for any remaining months of your contract. Even when it can provide the service in your new location, it may ask you to cancel your existing contract and take out a new one when you've moved. This would mean that you are locked in to the supplier for longer. Suppliers say that this process is less likely to run into problems than attempts to transfer a contract from one address to another. However, it can mean a couple of weeks without a broadband connection in the new home. This area is also under review and it is hoped that a new scheme that allows seamless transfer of your broadband service when you move will soon be in place. Other perils may also lurk in your broadband contract. "There are an awful lot of hidden charges," says Mr Lloyd. "When we looked at the contracts of 16 suppliers we found charges for technical support, late payment, hardware rental, installation or set-up and payment by means other than direct debit. Some suppliers levy cancellation fees even when there is no minimum contract." Always check the length of any contract, he says. "Some are getting longer - for example, if you take up AOL's offer of a free laptop with your broadband service, you will be tied in for two years. It is more important than ever to shop around and read contracts." If you do have a grievance with your supplier, Mr Lloyd recommends using Otelo or Cisas. "Arbitration panels scare the providers - but most customers don't know about them," he says. Broadband companies have to meet the cost of investigations into complaints against them, but the arbitrators' service is free to consumers. Moreover, the companies have to abide by any decision, while customers are free to keep fighting their case by taking it to court. "The small claims court is a quick and easy alternative," says Mr Lloyd. "But cases are often settled before they go to the arbitrators. For example, the broadband company may agree to drop a cancellation fee to prevent a case reaching arbitration - I've seen it happen on numerous occasions."Useful links:
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