ISPs still overcharging broadband users

The most common extra charges were for paper billing and non-direct debit payments

Research from price comparison site Moneysupermarket.com shows that 27 per cent of broadband users are still being hit with unexpected charges.

The findings come from a survey of 2,016 UK adults in late November and early December, which highlighted charges for paper billing, non-direct debit payments, late payment, installation, help line/tech support, exceeding downloading limits, activation fees and other additional costs.

An Ofcom report released today sets out guidance as to what communications providers have to do to meet their obligations under the Unfair Terms in Consumer Contract Regulations 1999.

"These companies need to be clear and upfront with their customers, and do more to make it easy for consumers to understand the charges, and make sure that extra charges that are not part of the price for the services the consumer is buying are fair," said Ofcom.

Telecoms and pay-TV companies now have until the beginning of April to make any necessary changes to their terms and conditions, after which Ofcom will " consider the best way to make sure they comply with the law".

Moneysupermarket.com calculated that these extra charges cost the average consumer an additional £36 per year. The most common extra charges were for paper billing (nine per cent of respondents), non-direct debit payments (seven per cent), late payment (six per cent) and installation (five per cent).

BT was identified as stinging its customers the most with an extra £51 per year, according to Moneysupermarket.com, followed by Virgin Media (£42), Sky (£35) and AOL (£29). This equates to over £160m in additional charges in the past 12 months, the report said.

"Although we've seen telecom bills fall in the past year, providers are still clawing back millions with unnecessary charges, many of which are unfair," said James Parker, mobile and broadband manager at Moneysupermarket.com.

"Ofcom should look at either eradicating these charges, or imposing strict caps to protect the consumer."

The comparison site gave five questions that customers should ask before signing a contract:

1. Is there a charge for paying by non-direct debit methods?
2. What is the download limit, and does the provider charge if you go over it?
3. How much does it cost to call the provider if you have a technical problem?
4. Does it cost to cancel the contract if you move home in the first 12 months?
5. Does the provider charge a setup fee?