My broadband provider has raised its prices, do I have to pay?
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Can broadband providers hike prices?
Broadband providers can raise their prices, either on a yearly basis or with an ad-hoc price hike.
We’re calling for providers to rethink mid-contract price hikes, as we feel they’re unfair and you should be able to leave without paying a fee if you don’t want to pay a higher price.
Until things change, there are rules that providers must follow. In some circumstances, customers can leave a contract without paying a penalty if they don’t want to pay the higher price. Here we look at a few different scenarios to explain when you can, and can’t, leave a contract penalty-free.
How broadband contracts work
When you sign up to a broadband contract, you’ll be given a monthly price which will need to be paid during the contract.
This usually lasts for a year or 18 months, and you’re committing to paying the company for that period in return for its services.
However, from time to time broadband providers raise their prices and you may not agree with, or want to pay, the higher bill.
In some cases you can leave a contract early, without paying a penalty, but this all depends on the provider’s terms and conditions and what kind of contract you have.
Broadband contracts and RPI
Your broadband provider may be able to hike the price of your fixed contract by the rate of the Retail Price Index (RPI).
What are RPI and CPI?
Broadband providers often use the Consumer Price Index (CPI) or the higher Retail Price Index (RPI).
They may also add on a set amount above the inflation rate, such as three or four per cent.
Each month the Government announces the rate of inflation, which shows the percentage price rise over the past 12 months.
I’m out of contract, can I leave?
If you aren’t within the minimum term of your broadband contract, you’re free to leave whenever you like.
You may be happy with your provider but as you’re not tied into a contract, you can choose to stay with it if you’re happy with a higher price or you can switch to a different firm.
We always recommend keeping an eye on other providers and offers anyway as loyalty rarely pays when it comes to broadband services.
If you are looking to switch, our best broadband providers guide is worth a read.
I’m still in a contract, can I leave?
The rules change slightly if you’re still in the minimum term of your broadband contract.
If a provider increases its prices, and you didn’t know about the increase before (it wasn’t written into the terms and conditions of your contract), then you should be able to leave without paying a penalty.
Rules set by the regulator Ofcom mean that customers can leave mobile, landline or broadband contracts penalty-free if a provider ups prices mid-term - if the hike is higher than the RPI rate.
You can cancel your contract and switch to any other provider, as long as you do so within 30 days of being told about the price increase.
But, if your broadband provider has warned you about rises in their terms and conditions you won’t be able to leave penalty-free if you’re still locked into a contract. If you do want to leave, you'll have to pay an exit fee.
What are the costs of cancelling a broadband contract?
If you want to cancel and you're still in your minimum contract, and the provider told you about the price hike in the terms and conditions, you may have to pay an early termination fee.
These fees can be very high. For example, if you sign up to an 18 month contract and want to cancel in the second month, you might have to pay 16 months' worth of fees.
Therefore think carefully before cancelling to decide if it makes financial sense or not. It may be worth staying with the provider until your contract has ended and then switching.