The government will form a new independent consumer advocate for the telecoms industry, protecting mobile and broadband customers from being ripped off.
Currently, there are dedicated, independent and well-resourced consumer champions advocating for consumers in other essential service sectors, including the energy, water, post, and transport markets. But until now there has been no comparable champion for telecoms consumers, and customers are paying the price.
Low rates of switching and opaque practices by telecoms companies mean households are collectively overspending by hundreds of millions of pounds each year on their entertainment and connectivity.
For example, three major mobile phone providers—EE, Three, and Vodafone—were recently found to have not decreased monthly bills of customers in contract after they’d paid off their handsets. Consumer advocate Citizens Advice estimated that four million mobile phone customers in Britain are paying for devices they already own, to the tune of £38 a month on average. Ofcom benchmarked the cost at £330 million each year.
This cost is just one loyalty penalty customers are paying in the telecoms industry. Rates of switching remain low in the broadband market, costing customers a cumulative of £1 billion a year, according to an estimate from the Competitors and Markets Authority (CMA).
Meanwhile, the Institute of Customer Service Satisfaction Index reveal that telecommunications and media perform poorly compared to other markets, ranking third last in 2019 and second last in 2019.
“It’s clear that some mobile and broadband customers are vulnerable to unfair business practices,” said Minister for Digital Margot James.
“We’ve already strengthened Ofcom’s powers to improve outcomes for consumers, but a strong, independent consumer champion will empower customers and hold telecoms companies to account, as well as working with them to drive improvements in their services,” she added.
The new mobile and broadband champion will have the power to conduct research and find areas where consumer experience can be improved. It will represent consumers in key policy and regulator debates, including surrounding the rollout of full fibre broadband and 5G mobile services.
The advocate will also directly support customers, especially the most vulnerable, as they engage in an increasingly complex market, much in the way the Energy Help Unit does in the energy sector. It will run campaigns, much like the Big Energy Saving Week, to help customers find the best deals and upgrade to faster and more advanced services.
Finally, the advocate will work directly with the industry to improve customer outcomes and promote best practices.
“The consumer advocate will help deliver a Britain that works for everyone putting more money into the pockets of ordinary working people,” said James.