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Citizens Advice has revealed that broadband prices rise by an average 43 per cent when fixed term deals end, with many customers unaware of the increase in cost.
A new report from the charity, which analyses the cheapest basic broadband deals from the five largest suppliers, shows that 35 per cent of broadband customers don’t realise they could face price hikes by staying on the same contract, with customers facing an average price rise of £113 a year. The majority of customers remain on their broadband deals for four years, meaning that customers are being charged a ‘loyalty penalty’.
Citizens Advice argue that broadband providers should offer more clarity how much their services will cost after the initial fixed deal ends, as well as extra protections for customers who are more vulnerable, such as those aged 65 or over, who the report finds are more than twice as likely than customers under 65 to have been in the same contract for more than 10 years.
Gillian Guy, chief executive of Citizens Advice, said: “Loyal broadband customers are being stung by big price rises once their fixed deal ends. 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.
“With people staying with their supplier for an average of four years, these extra costs can run into hundreds of pounds. Older customers and those who have less money are more likely to stay with their supplier for longer meaning their loyalty penalty could reach over a thousand pounds. 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.”
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