Broadband 'loyalty penalty' super complaint received by UK Govt

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Citizens Advice complaint to be considered by the CMA.

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Read more.

was with ee for a number of yrs on bb it was not till I was leaving they offered to reduce the price .there bb is great but I had to sign another 18mth contract I declined ..
at the end of this one i'll move again .. if they can discount it for a yr or 18mths why not keep the customer and make money by keeping it low ..

I'm fed up of wasting my time arguing the buck with my isp and phone provider about my contract. Everytime my three contract comes round for renewal i have to argue with them about deals.

"sorry sir, although you've been a loyal on time payment customer for a sum total of nearly 25 years cumulatively across your contracts, but you can't have that deal because that's for your friends and family"

Err, what?

I did have one dipstick once say to me when i challenged him that i can get better from a competitor but i want to stay with three, he actually said (notnparaphrased, actually what was said) "our opinion in Three is if you can get a better deal elsewhere, we want our customers to be happy and you should take that offer".

I asked him to confirm, on a recorded phone call, that he effectively told me my loyalty means nothing and i should go somewhere else. He said i shouldn't twist his words but i reminded him it was a recorded call both on threes and my side which he got a little upset about. Spoke to cancellations and they offered an S8 plus 30GB plan for my wifes contract for 25% off which was 15% better than what i was asking for. That idiot is not representative of my service with three, he was the by and far biggest exception.

I shouldn't have had to do that, why is my loyalty worth less than new business? I get increasing yearly revenue but what about the existing customers who make your bottom line?

I've had similar with Virgin but amusingly right at contract renewal my service gets terrible and can argue great deals with that leverage!

Sim only - and buy the phone on some other finance method.

Then problem doesn’t arise.

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Originally Posted by peterb

Sim only - and buy the phone on some other finance method.

Then problem doesn’t arise.

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That's skirting the problem, not fixing the problem. And from what I've been doing I've been able to get the contract i want and the discount makes it so that the monthly cost subtracting service makes it so my phone cost is equivalent to buying new via an alternative method.

Why bother with a financing option when i can be comfortable with a monthly opex...

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Originally Posted by Tabbykatze

I'm fed up of wasting my time arguing the buck with my isp and phone provider about my contract. Everytime my three contract comes round for renewal i have to argue with them about deals.

"sorry sir, although you've been a loyal on time payment customer for a sum total of nearly 25 years cumulatively across your contracts, but you can't have that deal because that's for your friends and family"

Err, what?

I did have one dipstick once say to me when i challenged him that i can get better from a competitor but i want to stay with three, he actually said (notnparaphrased, actually what was said) "our opinion in Three is if you can get a better deal elsewhere, we want our customers to be happy and you should take that offer".

I asked him to confirm, on a recorded phone call, that he effectively told me my loyalty means nothing and i should go somewhere else. He said i shouldn't twist his words but i reminded him it was a recorded call both on threes and my side which he got a little upset about. Spoke to cancellations and they offered an S8 plus 30GB plan for my wifes contract for 25% off which was 15% better than what i was asking for. That idiot is not representative of my service with three, he was the by and far biggest exception.

I shouldn't have had to do that, why is my loyalty worth less than new business? I get increasing yearly revenue but what about the existing customers who make your bottom line?

I've had similar with Virgin but amusingly right at contract renewal my service gets terrible and can argue great deals with that leverage!

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Congrats man. You gave some poor "Dipstick" a hard time for doing what management almost certainly told him to do. He knows the call is recorded. If he could give you want you want to get you off the line believe me he almost certainly would have.

With many companies only the retentions department can give you anything. Core customer service can't do squat except help with service issues or transfer you. I call Virgin Media yearly and threaten to cancel and I get what I want. Retentions are allowed to lower my bill. They're allowed to send me a new router to replace the old one. Core customer service are not allowed to do this in many companies so its no use giving them a hard time over it.

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Originally Posted by Tabbykatze

That's skirting the problem, not fixing the problem. And from what I've been doing I've been able to get the contract i want and the discount makes it so that the monthly cost subtracting service makes it so my phone cost is equivalent to buying new via an alternative method.

Why bother with a financing option when i can be comfortable with a monthly opex...

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True!

Of course the other side it that consumers should be responsible for looking after their own contracts. At the end of the initial contract they can move to Sim only keeping the handset.

Is this really an issue requiring legislation?

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Originally Posted by maxp779

Congrats man. You gave some poor "Dipstick" a hard time for doing what management almost certainly told him to do. He knows the call is recorded. If he could give you want you want to get you off the line believe me he almost certainly would have.

With many companies only the retentions department can give you anything. Core customer service can't do squat except help with service issues or transfer you. I call Virgin Media yearly and threaten to cancel and I get what I want. Retentions are allowed to lower my bill. They're allowed to send me a new router to replace the old one. Core customer service are not allowed to do this in many companies so its no use giving them a hard time over it.

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See, now there's the rub, he was not instructed to say that as i had a follow up from the complaints department regarding the matter.

What i have no patience for are Customer Service entities of which the persons themselves only want to follow the bare minimum of their hymn sheet. That team does have the power because i have negotiated with the first level team before and got the deals i wanted.

It's not a victory what happened there, I'm happy i got what i wanted but am unhappy it had to go that far. Now how can a system change internally if we follow exactly how it's meant to be externally as customers.

If a customer service rep is getting a hard time and is unable to continue providing service then their procedure is to send it to the right team or higher. He simply told me to piss off or pay higher prices.

I appreciate what you're saying but in that instance, you are wrong.

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Originally Posted by peterb

Is this really an issue requiring legislation?

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Yes, it's predatory nonsense. Loyal customers shouldn't have to beat discounts out of their service provider and get roped into another 1-2 years of service. It mightn't be so bad if it was just one or two doing it, customers would get sick of their nonsense and abandon them. But they're practically all at it.

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Originally Posted by aidanjt

Yes, it's predatory nonsense. Loyal customers shouldn't have to beat discounts out of their service provider and get roped into another 1-2 years of service. It mightn't be so bad if it was just one or two doing it, customers would get sick of their nonsense and abandon them. But they're practically all at it.

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Or it’s customers not taking matters into their own hands. If at the end of the minimum contract period a customer said that they were moving to a new provider, then the original service provider would soon start offering discounts. It’s just customer apathy or laziness that causes this. Customers owe their service providers no more loyalty that the service providers owe their customers. It’s a business transaction. No more - no less.

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Originally Posted by peterb

Or it’s customers not taking matters into their own hands. If at the end of the minimum contract period a customer said that they were moving to a new provider, then the original service provider would soon start offering discounts. It’s just customer apathy or laziness that causes this. Customers owe their service providers no more loyalty that the service providers owe their customers. It’s a business transaction. No more - no less.

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OK then, let's just shred all consumer protection and fraud laws. If they're just too lazy to not put literally every transaction under a microscope, and they deserve to be ripped off for not doing so, why bother with any of it?

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Originally Posted by peterb

Or it’s customers not taking matters into their own hands. If at the end of the minimum contract period a customer said that they were moving to a new provider, then the original service provider would soon start offering discounts. It’s just customer apathy or laziness that causes this. Customers owe their service providers no more loyalty that the service providers owe their customers. It’s a business transaction. No more - no less.

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Exactly. so in a way, consumers (as a group) get exactly what they deserve. If ALL consumers reacted to being taken for granted by moving, companies wouldn't take them for granted.

But, as a group, one section watches their contracts and renegotiates or leaves, so they can't complain. The other group don't bother and they can't complain either, since all they need to do to get a better deal is get off their fat chuffs and work at it a bit.

Companies don't give their best discounts to everybody because they know full well that customer inertia means they do not need to.

You're precisely right about the amount of "loyalty" owed in both directions - none whatsoever.

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Originally Posted by aidanjt

OK then, let's just shred all consumer protection and fraud laws. If they're just too lazy to not put literally every transaction under a microscope, and they deserve to be ripped off for not doing so, why bother with any of it?

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Because there are areas that a consumer might not reasonably be expected to take appropriate steps to protect the themselves. I don’t have the skills or equipment to determine if the loaf of bread I buy has been adulterated with chalk, for example.

But most smartphone operating systems come with a calendar application, so here is peterb’s guide to mobile phone contracts.

Buy broadband (or phone - same principle applies) and ask how long the contract is (not too difficult)

Play with shiny broadband (or phone) and put a date in the calendar two months before date end with note “ contract ends in two months - start looking around st the current offers” (fairly easy?)

Put another entry in the calendar one month before contract end with note “ring service provider to negotiate contract and discuss option” (also easy)

Act on reminders when they occur to ensure you are on the best deal at the time.

How difficult is that?

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Originally Posted by aidanjt

OK then, let's just shred all consumer protection and fraud laws. If they're just too lazy to not put literally every transaction under a microscope, and they deserve to be ripped off for not doing so, why bother with any of it?

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Because this is the internet and people are more worried about the rights of companies than consumer rights. It does not take into consideration the technical knowledge of people or even situations were people in certain more vulnerable demographics get targeted more than others especially after having to step in to help people myself.

Loyalty isn't really the right word - many people don't change because they can't or they are too frighted too, suggesting there is scope in the legislation for making the process more easily understood or protected.

Eg tennants could do with a lot better protection in terms of getting control of utilities suppliers and not being tied to minimum terms/penalties for moving.

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Originally Posted by kalniel

Loyalty isn't really the right word - many people don't change because they can't or they are too frighted too, suggesting there is scope in the legislation for making the process more easily understood or protected.

Eg tennants could do with a lot better protection in terms of getting control of utilities suppliers and not being tied to minimum terms/penalties for moving.

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It's clear in English & Welsh law (no idea about Scotland,) that the tennant has the right to control supplies as long as the landlord doesn't live with them (e.g. they're not a lodger,) and they pay the utilities themselves (so they aren't included in the rent.)

Furthermore if a tennant wants to change the meter for a smart one the landlord cannot stop them.

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Originally Posted by spacein_vader

It's clear in English & Welsh law (no idea about Scotland,) that the tennant has the right to control supplies as long as the landlord doesn't live with them (e.g. they're not a lodger,) and they pay the utilities themselves (so they aren't included in the rent.)

Furthermore if a tennant wants to change the meter for a smart one the landlord cannot stop them.

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I guess mine is breaking the law then. Great. Agents should have a duty to point this out then rather than siding with the landlord.

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Originally Posted by kalniel

I guess mine is breaking the law then. Great. Agents should have a duty to point this out then rather than siding with the landlord.

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How is he breaking the law? If the utility is in your name then change supplier if you want. It has nothing to do with the landlord and any clause they put in saying otherwise is unenforceable.

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Originally Posted by spacein_vader

How is he breaking the law? If the utility is in your name then change supplier if you want. It has nothing to do with the landlord and any clause they put in saying otherwise is unenforceable.

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Utilities are not in my name, but I pay the landlord back.

Just to say Internet Services Providers' Association is ISPA.

IPSA, as it seems to be abbreviated in the article, is the Independent Parliamentary Standards Authority (or a few other things too according to google). I was quite surprised when I got two thirds way down the article to see IPSA were responding to this! :)

almost all companies operate a default rip off policy which I feel is wrong. I have been with the same car insurance company for a number of years now but only once I have found a cheaper quote and they either match it or within say £5 as I feel it isn't worth my time to switch for a small amount of money. I am getting tired of having to complain at the end of a contract just to get a fair price. I have saved over £200 on car insurance by complaining. I wonder how many people still accept the renewal and how much free money companies get each year due to this.

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Originally Posted by lodore

almost all companies operate a default rip off policy which I feel is wrong. I have been with the same car insurance company for a number of years now but only once I have found a cheaper quote and they either match it or within say £5 as I feel it isn't worth my time to switch for a small amount of money. I am getting tired of having to complain at the end of a contract just to get a fair price. I have saved over £200 on car insurance by complaining. I wonder how many people still accept the renewal and how much free money companies get each year due to this.

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But how do you value a service like insurance (or anything else for that matter) or determine what is 'fair'?

It is only by shopping around and comparing prices that you can find out what other company's offers are. And if a consumer can't be bothered to look for a better price, it seems reasonable to assume that they are happy with the price being offered.

I have to phone Virginmedia on a regular basis as they normally add on loyalty discounts that last various amounts of time. I need to call again this week as I just had a letter telling me the bill is going up again, normally this doesn't apply if you are on a loyalty discount but no harm checking.

I am never off with them, just ring up and ask what they can do for mre.

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Originally Posted by peterb

But how do you value a service like insurance (or anything else for that matter) or determine what is 'fair'?

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Except when you can get new quotes from the same company for less than the renewal for what appears to be an identical policy. Admiral have been very crafty with this and make it very difficult to get a genuine new quote as an existing customer - why would they do this? I have to ping-pong between the AA and the RAC for breakdown cover because I assume the economics of charging people a 50% premium for the same service beyond the first year is more profitable even when offset against the people who leave. Why cannot there just be one fair price a company offers for a service? It might not be competitive against another companies product, but is it fair that I pay £50 for something and you pay £100?

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Originally Posted by peterb

It is only by shopping around and comparing prices that you can find out what other company's offers are. And if a consumer can't be bothered to look for a better price, it seems reasonable to assume that they are happy with the price being offered.

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As a member of a tech forum without issues using price comparison sites this is very much a non-issue for me. It's an inconvenience having to shop around, or call up to haggle over a renewal (and costs them call centre time compared to just buying a new policy online with no human interaction), but it's something that has become an annual routine (times by half a dozen for the number of policies/contracts). For some someone elderly or vulnerable it's a barrier however. Some people don't have internet in their homes, yet they still have house insurance.

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Originally Posted by jimbouk

As a member of a tech forum without issues using price comparison sites this is very much a non-issue for me. It's an inconvenience having to shop around, or call up to haggle over a renewal (and costs them call centre time compared to just buying a new policy online with no human interaction), but it's something that has become an annual routine (times by half a dozen for the number of policies/contracts). For some someone elderly or vulnerable it's a barrier however. Some people don't have internet in their homes, yet they still have house insurance.

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In which case ypu go to an insurance broker who - if he/she is any good - will broker the best deal for you.

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Originally Posted by peterb

It is only by shopping around and comparing prices that you can find out what other company's offers are.

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Nope, every other company is only offering their 'introductory' offer in big huge bold letters as well. They'll only stick you with the true cost however many months down the line, and if not that, then out of nowhere after the contract period lapses. That's the problem.

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Originally Posted by peterb

And if a consumer can't be bothered to look for a better price, it seems reasonable to assume that they are happy with the price being offered.

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Why would you think that's reasonable assumption? Why would you even assume they're at all aware that they're being stiffed by a marketing scam? Most people's bank statements are littered with hundreds of transactions every issue. They're not going to go through a financial forensic deep dive every time they have a new statement, it's neither practical nor reasonable. They place a high degree of trust in the businesses they have dealings with, and reasonably assume they'll act in good faith, and for the government to step in if they do not.

They should be grateful that long term customers continue to do business with them, not trying to scam them.

I see the people who don't switch regularly as subsidising my lower prices. As such I hope not too many of them figure it out as then prices will rise.

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Originally Posted by spacein_vader

I see the people who don't switch regularly as subsidising my lower prices. As such I hope not too many of them figure it out as then prices will rise.

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The problem is this often affects the elderly. 80-90 year olds don't tend to have a great handle on their finances and usually are of the old school mindset that loyalty will be rewarded. They're often on the worst energy tariffs and won't even consider changing them. Often if they're contacted by someone to offer them a switch, they'll just hang up (for one of many reasons). There are people like yourself who delight in getting a better deal and getting one over on the prats fleecing them. I get stressed to hell dealing with this stuff - I have far better things to do and this stuff really winds me up. I'm pumped up with massive doses of stress hormones to... er... keep me alive and so I really can't deal with this stuff. Sometimes it's nice and easy but often it's just a nightmare. If a company does jam the price up unreasonably at the end of the contract and then try and force me into a new one, I will leave them on principle. I think there should be a premium paid if you're not in a contract as the reason for getting it cheaper for a 12/24 month commitment is that you're basically buying in bulk and they're securing your income. Therefore, once that deal has lapsed and you're on a rolling 1 month contract I think the payment of a small premium is reasonable. When it's something like a mobile phone company still charging you for a handset that is now paid off after the contract has ended without making any effort to contact you, then THAT is entirely unreasonable gouging of the customer.

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Originally Posted by aidanjt

Nope, every other company is only offering their 'introductory' offer in big huge bold letters as well. They'll only stick you with the true cost however many months down the line, and if not that, then out of nowhere after the contract period lapses. That's the problem.

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So at the end of the contract you shop around for more introductory offers.

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Originally Posted by aidanjt

Why would you think that's reasonable assumption? Why would you even assume they're at all aware that they're being stiffed by a marketing scam? Most people's bank statements are littered with hundreds of transactions every issue. They're not going to go through a financial forensic deep dive every time they have a new statement, it's neither practical nor reasonable. They place a high degree of trust in the businesses they have dealings with, and reasonably assume they'll act in good faith, and for the government to step in if they do not.

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So you don't think you should be responsible for checking your own bank statements and be responsible for your own financial affairs?

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Originally Posted by aidanjt

They should be grateful that long term customers continue to do business with them, not trying to scam them.

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This is business, not friendship.

Gratitude and loyalty don't come into it. If a company is 'grateful' for my business, they can show it with a discount - in which case they buy my loyalty. They might also buy it with good customer service, in which case I am happy to pay a premium. But if not - I'm gone - I owe them no loyalty and I expect none in return.

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Originally Posted by peterb

So at the end of the contract you shop around for more introductory offers.

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So you move from one fraudster to the next? Ignoring the fact that it's disruptive and unnecessary to do an annual ISP hop? Also, ignoring the fact that too many wont because they're unaware of the fraud, as all good frauds do. That's why they're doing it (aside from the government being nowhere on this, not even informing the public on it).

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Originally Posted by peterb

So you don't think you should be responsible for checking your own bank statements and be responsible for your own financial affairs?

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It isn't the consumer's job to not be defrauded. Consumers place a lot of trust in who they do business in order to give them access to their bank account via their credit/debit card details or a direct debit mandate. If they abuse that trust they should be punished. If we just let rampant fraud occur, the system will start breaking down because nobody would trust anyone.

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Originally Posted by peterb

This is business, not friendship.

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Correct. And lawful and honest businesses aren't built on defrauding customers.

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Originally Posted by peterb

Gratitude and loyalty don't come into it.

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If does if you want repeat and growing business.

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Originally Posted by peterb

If a company is 'grateful' for my business, they can show it with a discount - in which case they buy my loyalty.

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The non-fraud rate isn't a discount, it's just the normal price. That's what they advertise, right? And they wouldn't be intentionally misleading their customers with fraudulent claims now, would they?.

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Originally Posted by peterb

They might also buy it with good customer service, in which case I am happy to pay a premium. But if not - I'm gone - I owe them no loyalty and I expect none in return.

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Sure, but you can expect to not be defrauded.

There is no “fraud”. If there was, there would be prosecutions as there is a whole section of law enforcement dedicated to fraudulent activity.

A business may charge what it likes for a service or good, it is an offer to the prospective purchaser. The terms and conditions of the contract are visible to the purchaser, who accepts or declines them.

Consumer law already (rightly) protects consumers against unfair contractual terms and gives remedies against broken contacts on both sides.

In the case where the supplier may be in a monopoly situation, there is a case for legal controls and there are regulators for that.

It is not unfeasible to shop around when a contract ends, or would you rather see a situation that when the contract ends your broadband/phone/insurance just stops?

But if you find it too difficult see the handy guide I posted earlier. https://forums.hexus.net/hexus-news/...ml#post4016828

As a Zen customer I find this all a bit odd. There aren't any introductory offers, but they do have good customer service which I have hardly needed to use because the connection is superb. I use this for work, so I can't go cheap with the dropped connections, poor performance and dynamic IP shenanigans that often go with low pricing.

I suspect that banning a "loyalty penalty" will mean banning initial offer pricing, not the higher end price, so you just go straight to the pricing after 12 months. I think people should be careful what they wish for.

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Originally Posted by DanceswithUnix

I suspect that banning a "loyalty penalty" will mean banning initial offer pricing, not the higher end price, so you just go straight to the pricing after 12 months. I think people should be careful what they wish for.

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And that price would be able to be compared more accurately with competitors I expect, so if competition is working, would be driven down to a sensible margin rather than making high margins off non-movers to be able to subsidise initial offers.

IPSA says that it is worried that Citizens Advice talking about a 'loyalty penalty' conflates customer loyalty with ill-informed or unengaged customers

Absolute twaddle, they know they are fleecing existing customers to subsides new ones, and now that the powers that be are having a good hard look, they are to put it blunt, <removed> scared that the cash cow wlll end and that they will be forced to offer the same prices to existing customers or stop subsidising new ones and risk a drop in new business, resulting in their market share dropping and shareholders revolting. Biggest loser will be Virgin Media, as this is their bread and butter way of price gouging !

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Originally Posted by Wolfclaw

IPSA says that it is worried that Citizens Advice talking about a 'loyalty penalty' conflates customer loyalty with ill-informed or unengaged customers

Absolute twaddle, they know they are fleecing existing customers to subsides new ones, and now that the powers that be are having a good hard look, they are to put it blunt, <removed> scared that the cash cow wlll end and that they will be forced to offer the same prices to existing customers or stop subsidising new ones and risk a drop in new business, resulting in their market share dropping and shareholders revolting. Biggest loser will be Virgin Media, as this is their bread and butter way of price gouging !

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But if customers moved to take advantage of the incentive sign up, then that strategy wouldn't work :). And incentives are offered in all other aspects of commerce - Buy one get on free offers for example, or dscount coupons for groceries. Should they be stopped too?


Wearing my admin hat - I have edited your post as you triggered the swear filter - I don't think the editing has materially altered the sense of your post.

The concept of loss leaders is nearly as old as retail itself. All it'll do is increase prices for everyone.

Even the Romans knew the truth: caveat emptor.

CMA is as teethless as 20yrs dog...essential services such as gas/broadband/mobile phone/electricity should be heavily regulated not run for profit by ruthless corporations that again and again come up with sneaky tactics to strip us out of money.

almost everyone feels this, some subscription services from non major companies do this as well (usually over long term contracts that where agreed upon over the phone)

I'll remember this when I leave sky. I mean, how hard can it be to remember to call a company at the end of a fixed duration contract? I'm told you'd have to be an idiot (thanks HUKD) to have problems with this.

Aren't folks nice!

Peterb hit the nail on the head with the smartphone calendar idea. Towards the end of my tenure with VM I was advising all customers that had any form of time limited discount to set a reminder for 30 days beforehand.

The problem lies in more than one place, incentive's for sales people invariably leads to customers not getting the full info if the sales person deems it harmful to their chances of making the sale. ie : not explicitly mentioning that the deal is for 12 months, but it also lies with consumers not doing their research and finding out where their money is best spent. I don't buy a kitchen appliance without referring to which? magazine, a car without doing a hell of a lot of research and at least a test drive nor would I get a contractor in without having some form of assurance of their competency, i don't see it being any different with broadband or other utility providers.


As far as loyalty is concerned, there is none. These are large faceless corporations (no matter who is fronting their adverts) to whom you are just a number, not your local grocer who went to school with your mum and throws in a couple extra tomatoes for the same price, treat them the same way.