Ofcom warns providers to help those in financial difficulty

Charlotte Whyatt • 23 Jul 2021

They believe there could be a "strong case" for introducing mandatory low-cost packages.

Ofcom has issued a warning to UK telecoms providers urging them to do more to help those customers struggling financially or face potential intervention.

According to the industry regulator, new research highlights that many low-income families are finding it difficult to afford an internet connection and not all are not receiving the appropriate support from their supplier. 

They found that nearly two million consumers across the UK struggled to pay their internet bill in 2020, despite certain bundles being significantly cheaper when compared to a few years ago.

The average “new customer” prices for superfast broadband and landline packages for example were almost 20% less than were in 2015. 

This study also revealed that from January 2020 and January 2021 total debt amongst broadband and mobile customers rose from £475 million to £550 million.

Certain providers including BT, Virgin Media, KCOM and Hyperoptic now offer low-cost packages for customers on benefits, priced between £10 and £20 a month, which helps them save over £200 a year on average.

Take up of these packages has been quite low however with only around 40,000 households having signed up. This equates to 0.15 of homes across the country which is just 1% of those on out-of-work benefits.

Ofcom believes that more broadband providers should offer this type of low-cost package to help customers in financial difficulties and has requested those who do increase sign up rates.

While it is up to the UK government to officially decide whether or not a formal review is required, Ofcom has said they believe “there would be a strong case for exploring whether mandatory social packages would be necessary to fill the gaps in support.”

“The fact that so many providers still aren’t taking responsibility for protecting lower income customers shows just how precarious it can be to rely on voluntary arrangements and goodwill,” said Citizens Advice’s director of policy Matt Upton.

“Ofcom are right to say things aren’t happening quick enough. If we don’t see action soon, the Government needs to get involved,”

Source: Evening Standard