Broadband customers who suffer service failures may be missing out on money they are owed because they are unaware of their rights to automatic compensation.
Under the telecoms regulator’s “automatic compensation” scheme, customers should receive set daily payments of up to £9.76 if an internet outage is not rectified after two days, or if an installation date is missed.
They should also be paid £30.49 if an appointment is missed or cancelled at the last minute (these are the new amounts – they increase annually in line with inflation).
The scheme was launched in 2019 by Ofcom to tackle widespread service failings. The idea was that customers let down by their internet service providers (ISPs) receive suitable redress without having to make a claim.
But campaigners say that, as complaints rise, unclear rules are allowing companies to get out of paying up, and that customers lack the information they need to challenge them. Ofcom has told the Observer that it is “looking into” reports of problems with the scheme.
Cameron Park was left out of pocket by more than £600 after BT reneged on its initial pledge to compensate him for a five-month delay to his new broadband service.
The installation was scheduled for July last year, but nothing happened. At the end of November, he was told that he would have to pay an unspecified excess construction charge of up to £3,000 before the work could proceed. When he refused, BT cancelled his contract.
Its sister company, Openreach, which manages the broadband network, admitted the charge had been raised in error after the Observer intervened. Park was finally connected in January, and BT agreed he would be compensated for 141 days of delay.
Under the automatic compensation scheme, he was entitled to £5.83 a day (the compensation level at the time), amounting to £822. But BT then claimed it had pledged the sum in error, and insisted he accept £215. It stated that it was not liable for 75% of the delay, because it was caused by an unspecified “third party”.
Ofcom’s code of practice says that providers are liable for compensation whether or not delays are caused by third parties. However there are exemptions, such as if a law or regulation would have to be breached to avoid a delay. Providers are expected to explain to customers why a payment is not due, which BT did not do.
“At no point, through the whole process, was a third-party delay mentioned, and nor is this reason for exemption mentioned on BT’s own website,” says Park. “I was, instead, repeatedly informed, in writing, that I would be paid the full amount.”
When the Observer asked for details, BT said Park’s long wait was due to health and safety requirements involving a power company, and that this was not mentioned due to safeguarding. It then claimed the culprit was a landowner who had to grant permission for cables to be laid.
Park took his complaint to the Communications Ombudsman, whereupon BT stated that he was to blame for 107 days of the delay because he had not accepted the erroneous excess construction charge.
Compensation is not due if it was the customer who caused the delay. The ombudsman therefore ruled in BT’s favour.
It revisited its decision after BT’s claims were questioned by the Observer, but only awarded Park an extra £64. It said the rules relating to exemptions had been correctly applied, but, “having reviewed this case further, and the information available to us, we acknowledge there is an additional period of automatic compensation to be paid and we’ve apologised for this oversight”.
BT has since agreed to pay another £100 as a “goodwill gesture”.
It said: “We’re very sorry Cameron’s experience has fallen below the high standard we strive to provide our customers. Our complaints team has contacted Cameron and provided additional compensation, which he has accepted.”
Consumer advice group Broadband Savvy says customers are let down by opaque rules and a “toothless” ombudsman. “We’ve seen a 33% increase in requests for help this year, compared to 2023,” said founder Tom Paton. “There’s been numerous instances where the ombudsman has found in the ISP’s favour, despite it leaving the consumer offline for months for no good reason. And when it does uphold a customer complaint, it has no real power to force the provider to act.”
The ombudsman insists that it reviews every complaint fairly and impartially. “Our role is either to put the consumer back in the position they were in before the issue occurred, or if suppliers have not caused consumer detriment, then no action will be taken,” it said.
According to consumer rights expert Martyn James, it is the voluntary code of practice that is toothless, and should be replaced by legally-binding regulations.
“If the rules are open to interpretation, businesses can get out of paying,” he said. “Most customers will give up when turned down with a poor excuse, or offered a rubbish settlement, as they’ll take the ISP’s word for it.”
Ofcom told the Observer that it was the ombudsman’s role to judge whether an exemption had been applied unfairly. It said the scheme had increased the amount of compensation given to customers fourfold, with £60m paid in 2022, and that a voluntary code of practice was the “quickest and most proportionate” way to get companies to sign up.
However, it admitted “unforeseen issues” could arise, and said customers were encouraged to get in touch with problems to help it monitor compliance.
“We are aware there are complications with a small number of cases of automatic compensation, and this is something we are looking into,” it said.
“Providers signed up to the automatic compensation scheme are required to pay out to customers when there is a delay to the start of a new service. And this includes if the delay is caused by an event beyond a customer’s, or the provider’s, control, such as anything related to a third party.”
