Broadband customers are trapped between choosing huge mid-contract price hikes or exit fees of over £200, according to Which? consumer champions.
Which? is now urging telecoms firms to let their customers leave their contacts without penalty if prices are hiked mid-contract.
They have slammed the price increases as "hugely concerning" and "difficult to justify" given the cost of living crisis and rising bills for many households across the UK.
In a huge blow to customers, many this year face their mid-contract prices increasing by more than 14%.
This comes after customers saw their broadband bills climb by nearly 10% last year, and as the cost of living crisis continues to push up prices of other bills.
Mobile and broadband customers usually their mid-contract hikes around April, which fall in line with the Consumer Price Index (CPI) plus an additional 3% to 3.9%.
It means customers of firms such as BT, EE, Plusnet, Shell Energy Broadband, TalkTalk and Vodafone, may end up paying more than what they originally signed up for.
This is because they do not know how much the prices can rise when they first sign up.
Which?'s latest broadband survey shows that BT Group - which includes BT, EE and Plusnet - has already announced that they will go ahead with price rises of 14.4% for the vast majority of their customers.
Meanwhile, the average EE customer would see the largest potential annual increase of £66.89.
This is closely followed by BT customers who could pay an extra £65.59 a year.
And Vodafone, TalkTalk and Plusnet customers could pay an extra £54.86, £54.22 and £52.67 a year respectively.
While Shell Energy Broadband customers could see the lowest increase of this group, customers will still have to cash out an eye-watering £49.51 more.
Despite Ofcom rules stating that telecoms providers must offer their customers the right to exit their contract penalty free - if they are subject to unexpected price rises which are not stated in their contract - the rules do require the relevant terms to be set out prominently and transparently, at the point of sale.
Therefore, if the mid-contract price rises are written into the terms and conditions, Ofcom’s rule is that in those cases the customer does not have the right to exit penalty free.
However, the regulator's terms do not specify that the terms be set out transparently during the sale, which is something that the regulator is currently investigating.
Regardless, Which? is calling on all providers to carefully assess what level of price increase can be justified given the current economic climate, and to allow customers to leave their contract without penalty.
The informed consumer choice brand calculated the exit fee the average customer with 12 months remaining on their contract would face if they left early.
They found that BT customers face the highest exit fees of £219.04.
This is followed by Shell Energy Broadband, EE and Plusnet customers, who would pay £160.20, £150.49 and £144.75 respectively.
Vodafone would pay an exit fee of £123.72.
And TalkTalk customers would pay the lowest exit fees of £122.40.
While Sky and Virgin Media have not announced this year's approach to price increases, they traditionally allow their customers to haggle or switch when notified of such hikes.
Speaking about the price hikes, Rocio Concha, Which? Director of Policy and Advocacy, said: “It’s hugely concerning that many broadband customers could find themselves trapped in a lose-lose situation where they either have to accept exorbitant - and difficult to justify - mid-contract price hikes this Spring or pay costly exit fees to leave their contract early and find a better deal.
"Which? is calling on providers to let their customers leave without penalty if they face mid-contract price hikes. Providers should also carefully consider the level of any price rises when many consumers are already under huge financial pressure.
"With many households struggling to make ends meet, it is completely unfair that people are trapped in this situation. Telecoms providers need to step up and play their part to support their customers through the cost of living crisis."
Exit fees for each provider
- BT: £219.04
- EE Broadband: £150.49
- Plusnet: £144.75
- Shell Energy Broadband: £160.20
- TalkTalk: £122.40
- Vodafone: £123.72
A spokesperson for BT Group said: “With the December 2022 CPI rate now announced, we can confirm our price change will be going ahead on 31st March.
"We expect the average customer will see their price rise around £1 per week. This price rise doesn’t apply to all our customers.
"Over 3 million customers across our BT Home Essentials, EE Mobile Basics, PAYG, BT Basic, landline-only and Home Phone Saver will have their prices frozen through 2023.
"Although telecoms bills remain a small fraction of total average household spend, we know that everything adds up.
"We take seriously our responsibility to ensure our services are accessible to the widest group of customers possible through our market leading social tariffs.
"Customers who are struggling financially and are eligible for Home Essentials can move penalty free at any point in their contract, this also includes EE and Plusnet customers.
"We are balancing our own rising costs due to high inflation and making vital digital infrastructure investments for the UK."
A spokesperson for Shell Energy Broadband said: "Our terms allow for a price increase no higher than CPI + 3%. As ever, our customers will be the first to hear about any change in prices.
"We recognise the budget pressures our customers are experiencing, and we will do all we can to help customers who are struggling to pay.
"We have a £20m Helpfund to support the most vulnerable, and we will assist with payment plans or moving customers to a cheaper tariff whenever possible."
A TalkTalk spokesperson added: “This regulated CPI-linked price rise is preventable.
"There is still time for Ofcom to act and reduce the wholesale price increases that lead to these price rises.
"These are exceptional circumstances, and families and businesses across the UK need the regulator to act.”
