One in seven broadband and mobile customers are paying a ‘loyalty penalty’ for not switching to a new provider at the end of their contracts, according to new research by Citizens Advice.
In the midst of a cost-of-living crisis, the charity has urged telecoms regulator Ofcom to help customers who are paying more for services than new customers who take advantage of deals.
Citizens Advice found that up to a third of broadband customers could be paying a so-called ‘loyalty penalty’ for staying with a provider.
It comes after Ofcom’s own research last year found that customers switching to new providers could save £61 and £83 on broadband and mobile bills, respectively, each year.
Citizens Advice believes that the costs are egregious at a time when households are struggling with the rising costs of goods and basic services.
It cited the example of one loyal customer, who says that she has spent £3,000 more for a complete bundle of TV, landline and broadband services during the last 16 years.
During that time, new customers have been able to sign up for the same services in a £30 per month package while her bill has soared to £80.
Citizens Advice spokesperson Mike Emmett said that many customers are often reluctant to switch due to the fear of credit checks.
He added: “It’s so frustrating when we see people who are on the lowest incomes paying the loyalty penalty, as they’re forced to jump through so many hoops to try and sort it.”
The recommendations from Citizens Advice follow Ofcom’s own attempts to make it easier to switch deals with a new ‘One Touch System’, which is set to launch next year.