Broadband customers who fail to shop around at the end of their initial contract or haggle for a better deal from their supplier are overpaying by up to £220 a year.
Analysis by Which? found BT’s broadband customers were paying the biggest loyalty premium. Only one firm, Utility Warehouse, offered loyal customers the best deals, it said.
Which? asked consumers how much they paid for their broadband, whether they had haggled for a new deal in the past 12 months and what they had saved. It then compared the results to the cheapest deals offered to new customers.
Which? found 72% of the broadband customers it questioned had been with their provider for more than two years and many were overpaying as a result.
Broadband providers advertise cheap introductory deals to entice new customers – usually for the first 18 to 24 months – in the hope they will remain customers but they then subsequently pay the higher levied monthly charge.
The average annual broadband bill paid by loyal BT customers was £540 a year, compared with £372 for customers who haggled or the £320 paid by a new customer.
Which? said Virgin Media had the second-largest loyalty premium. Virgin customers who pushed for a better deal paid an average £384 a year, saving £156.
New TalkTalk customers paid £240, which was £84 less than the £324 paid by loyal customers . Those who haggled at the end of their contract could only save a few pounds a year, paying £318, Which? said.
Only Utility Warehouse offered its best tariffs to loyal customers. A new customer signing up for the firm’s cheapest deal would be paying £25 more a year than an existing one, it found.
Alex Neill, a Which? managing director, said switching providers was the best way to ensure a good value tariff.
“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,” he said.
Alex Tofts, a spokesman for Broadband Genie, said customers aged 55 and older were overpaying the most.
“The majority of users have been with their provider for over five years, 41% have never switched broadband and around half have never tried to negotiate with their broadband provider. The switching process was made easier in 2015, so in most cases the new provider will do most of the legwork when you switch,” he said.
BT said in a statement: “We agree that customers shouldn’t overpay for the service they receive and we encourage customers to contact us to discuss the deals and offers available to ensure they are on a package that suits them.”
