Ofcom wants providers to automatically compensate their subscriber for moments when service is poor. The UK regulator has proposed rules that would require providers pay compensation in the form of a cash payment, or credit on a bill, without customers having to go through potentially lengthy and difficult claims processes. The rules would apply to landline and broadband household and business customers. Ofcom is now inviting interested parties to submit comments to the consultation around the rules until 5 June. It expects to publish its decision around the end of the year.
In response to Ofcom’s plans, BT, Sky and Virgin Media have jointly put forward a draft proposal to introduce automatic compensation through a draft voluntary industry code of practice. Ofcom said that it does not, at this stage, believe that the proposal sufficiently meets its concerns.
For households, automatic compensation would be warranted in case when the customer landline or broadband is not fixed quickly enough after it has stopped working, when the new landline or broadband service is not up and running on the day promised, or when an engineer doesn’t arrive for an appointment as scheduled. Ofcom said that with the rules, landline and broadband customers would receive up to GBP 185 million in new compensation payments each year.
The proposals are part of the regulator’s plans for a step-change in telecoms service quality. Analysis by Ofcom showed 5.7 million cases of consumers experiencing a loss of their landline or broadband service, engineers failing to turn up for around 250,000 appointments, and 12 percent of landline and broadband installations getting delayed, affecting more than 1.3 million people. Compensation payments are currently given ad-hoc to only a minority of those suffering problems (in up to 15% of cases), and can fail to adequately reflect the harm caused.
For small businesses, Ofcom wants clearer, more detailed information upfront about the landline and broadband service on offer, including whether the SMEs are entitled to compensation, and how much, when problems occur. SMEs should then be able to negotiate terms with the provider, if needed. Research by the regulator found that around half of SMEs (49%) were uncertain of their rights when providers fell short.
