Broadband providers like BT Group Plc (LON:BT.A) could be forced to pay-out to unsatisfied customers instantly, under new proposals from UK telecoms regulator Ofcom.
It could benefit as many as 2.6mln customers, according to Ofcom, which said the customers that have received poor service shouldn’t have to fight for fair compensation.
"Customers would be entitled to automatic compensation, without having to go through a potentially lengthy and difficult claims process," Ofcom said.
A total of £185mln of compensation could be paid out to UK customers, Ofcom said, for such issues as slow repairs, missed deadlines and engineers who don't show up as promised.
It is proposed that telecoms firms would have to pay £10 for every day that a service is not repaired, £30 each time an engineer fails to turn up for scheduled appointments or £6 per day for delays starting new services.
Ofcom said that under current rules there were 1.1mln instances that were subject to compensation each year but with the new proposals this would rise to 7.2mln instances.
The watchdog said its analysis shows that each year there were 5.7mln cases of consumers experiencing a loss of their landline or broadband, about 250,000 cases of failed engineer appointments and one in eight landline and broadband installations were delayed.
The regulator has started a consultation process with telecoms firms on its tougher proposals and will publish its decision around the end of the year.
BT, Sky and Virgin Media have drafted a proposal for automatic compensation through a voluntary code of practice. However, Ofcom is critical of those plans, saying they currently fail to meet concerns.
In a statement, a Virgin Media spokesperson said: "It's important that customers are treated fairly when services can't be delivered, but this is best achieved through a robust industry-led approach.
"The industry is working together on ambitious reforms that would incentivise communications providers to compete to provide customers with a better service, while also setting minimum standards that providers would have to meet."
The news comes the same week Ofcom fined BT-owned Plusnet £880,000 for continuing to charge more than £500,000 to more than 1,000 customers who had cancelled their accounts.
Ofcom has promised to crack down on bad behaviour in the sector. In October, it fined Vodafone £4.6mln in October over customer service issues and in January it made EE pay a £2.7mln penalty for overcharging customers.
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