Broadband customers who stay with the same provider and do not haggle for a better deal are being hit with “loyalty penalties” of up to £220 a year, a consumer group has warned.
Which? found that in some cases consumers would be better taking up a new superfast broadband contract rather than staying loyal to their provider without haggling as it would work out cheaper over the course of a year.
BT customers are at risk of paying the biggest loyalty premium – £220 – of the eight major providers, the watchdog said.
The average annual broadband bill paid by a loyal BT customer is £540 a year compared to £372 for those customers who haggled – £160 more than the provider’s cheapest fibre deal for a superfast connections, its survey suggests.
But new customers who take up a contract for standard broadband with BT now will pay just under £320 a year until their contract is up, usually at least 18 months.
Broadband providers advertise cheap introductory deals to entice new customers, who often do not switch away even after seeing a substantial price hike at the end of the contract.
Which? found 72% of broadband customers have been with their provider for more than two years.
Virgin Media had the second highest loyalty premium, with a £191 difference between its cheapest current deal and the average yearly cost for loyal customers.
Long-time customers were paying £540 on average but those who negotiated a better deal saved an average of £156.
TalkTalk’s new customers paid about £85 less than loyal customers, while Plusnet customers who haggled were paying £48 less on average than those who did not at £252.
Alex Neill, Which? managing director of home products and services, said: “Broadband customers will be appalled that not only could they be paying through the nose simply for being loyal to their provider but that they could, in some cases, also get a much faster internet connection for a fraction of the price that they are currently paying.
“If you are willing to negotiate and happy with your current service, haggling might get you a good discount, but researching the deals available and switching is the best way to ensure you’re on a good value tariff.”
Which? surveyed 3,131 members about their standalone broadband in October 2018.
A BT spokesman said: “We are clear with new customers who can benefit from promotional offers what the price will be when this period ends.
“We also encourage customers to contact us to discuss the deals and offers available to ensure they are on a package that suits them.”
Digital minister Margot James said: “This is yet more evidence that loyal customers are being penalised, which is not right.
“We’ve strengthened Ofcom’s powers to protect consumers and they are taking action by proposing that providers make it clearer to customers when they can switch to a better deal.”