Ofcom raise automatic compensation payouts for UK broadband woes

The UK telecoms, internet and media regulator, Ofcom, has recently increased the payment amounts issued to consumers under their automatic compensation system, which requires some broadband ISPs to compensate customers (cash or bill credits) for internet connectivity mishaps and installation delays.

The voluntary system, which first launched all the way back in April 2019 (full summary), was until last month designed to compensate consumers by £9.33 per day for delayed repairs following a loss of broadband (assuming it isn’t fixed within 2 working days). Missed appointments could also attract compensation of £29.15 and a delay to the start of a new service would be £5.83 per day.

However, the compensation amounts are designed to increase in April every year (in line with inflation), which is based on the Consumer Price Index (CPI) as of 31st October in the previous year. This is perhaps a little bit awkward now since, on the flip side, Ofcom are separately preparing to ban mid-contract price hikes for consumers that are linked to inflation or % based changes.

In any case, the change means that member ISPs will now need to pay out £9.76 per day for delayed repairs, £30.49 for missed appointments and £6.10 per day for a delay to the start of a new service. One catch with this is that higher payments can indirectly contribute to general bill hikes and often discourage other ISPs from joining – especially smaller providers, due to the high cost and technical requirements (new systems needed .) of supporting the scheme. We should point that some of those self-excluded providers already have their own approaches to compensation.

Take note that this change was actually introduced right at the end of last month, but we’re playing catch-up today after overlooking it during the Easter Holiday period. ISPreview