Customers face 'loyalty penalties' for sticking with same broadband provider

Customers loyal to a particular broadband provider are being left shortchanged by a sharp increase in price once the introductory deals end, a report from Citizens Advice has found.

The charity said prices jump by an average of 43% or £113 a year once the initial deal ends, five times more of what customers used to pay in 2011 to remain with the same provider.

More worryingly, Citizens Advice said, over a third of customers were unaware of the price increases, which prompted the charity to urge providers to be more transparent about prices. Among the UK's main broadband providers, only Virgin Media did not hike prices after the first 12 months, but customers with other companies face what Citizens Advice described as "loyalty penalties" of up to £200.

BT and Sky hiked prices by 67% and 53% after a year, translating into a £197 and £120 increase respectively, while EE and TalkTalk hiked the cost of a contract by 36% and 28% after 18 and 24 months respectively. On an annual basis, the increase works out to an extra £90 for the former and an added £66 for the latter.

"Loyal broadband customers are being stung by big price rises once their fixed deal ends," Gillian Guy, chief executive of Citizens Advice, said.

"The government has rightly put energy firms on warning for how they treat loyal customers – the actions of broadband firms warrant similar scrutiny."

Citizens Advice, which called for the government to scrutinise broadband firms, added poorer and elderly customers were more likely to bear the brunt of price hikes as they were more likely to remain loyal to the same provider.

Among the 3,000 people surveyed, respondents aged 65 or over were more than twice as likely as to have been on the same contract for more than 10 years compared with younger users.