From 1st April 2019 the UK telecoms regulator, Ofcom, introduced new compensation rules for fixed-line voice and broadband services.
BT, Sky, TalkTalk, Virgin Media and Zen Internet have all signed up to the code which applies to purchases from 1st March 2019.
Compensation and Definitions
There is a difference between ‘proactive’ and ‘reactive’ compensation.
- Reactive – Loss of service: GBP8 (USD10) per calendar day
- Proactive – Service activation delay: GBP5 (USD6) per calendar day
- Proactive – Missed appointments: GBP25 (USD32) per instance
Loss of service: a line or broadband service failure that is not fixed after two working days. Eligibility for compensation cannot be proactive, so the trigger is from the point a customer raises a fault for a total loss of service. This means services with intermittent faults or degraded quality, such as low broadband speeds or poor line stability, don’t qualify and follow the providers’ existing fault resolution journeys.
Service activation delay: if the service start date is not met, customers are eligible for GBP5 (USD6) per calendar day. Providers have the data to know if activation is delayed and must apply the credit regardless as to whether the customer has raised the issue.
Missed appointments: appointments missed or cancelled with less than 24 hours’ notice require a proactive credit of GBP25 (USD32) per each instance. There is wiggle-room for providers who can change internal procedures or the definition of what constitutes an ‘appointment’, but the spirit of the code will ultimately define this.
Though working days feature in the period of redress, compensation applies to calendar days. Ofcom and the signatories for the code understand that non-working days should still be compensated for.
Payment and Limits
There is no cap for the period or amount of compensation if the provider doesn’t resolve the issues. This deliberate requirement of the code is designed to ensure that providers invest in resolving service issues rather than ignoring it until the customer goes away.
Payments must be in the form of a bill credit and is monetary in nature. Customer bills will offset the credit value against accruing charges, but it means a customer closing the account with a positive balance will have to be paid the balance.
- “Any compensation shall be made in a timely manner and no later than the date:
- 30 calendar days after a delayed provision is resolved or the customer or Communications Provider terminates or cancels the service intended to be activated;
- 30 calendar days after the Total Loss of Service is resolved or the customer or Communications Provider terminates the service;
- 30 calendar days after the date of the missed appointment.”.
Providers can offer alternatives for an equivalent service which may help them in long-term issues (i.e. wayleave scenarios), by providing a mobile solution as a mitigation.
Eligibility exceptions exist, including where the customer is in breach of the terms of the service, or the root cause being the customer’s equipment or behaviour within the home.
Other exceptions include whether the provider believes the claim to be “fraudulent, frivolous or vexatious”, or if it is not reasonably practicable for the provider to avoid obligations arising from an emergency event under Part 2 of the Civil Contingencies Act 2004, or if the customer has committed an offence under sections 125 or 126 of the Communications Act 2003.
Wayleave has also been in discussion, but the code stipulates that communications providers carry the cost even if there are works taking place beyond their control.
No Small Undertaking
The requirements for compensation are straightforward enough but delivering them carries significant investment for providers, including changes to all channels to ensure customer awareness and explain processes (including appeals processes).
However, the greatest challenges are ensuring processes and contracts are changed, systems and data are properly used, and people are trained. Providers have a lot of work to do to ensure field operations and third parties (such as shipping partners) are brought in-line with the new measures and requirements. Adhering to the code is achievable but operational overheads are high if too many of the supporting processes and teams must manually manage the minutia.
Customer credits are deemed the responsibility of the provider and not third parties. Communications providers can cross-charge one another if required, but this requires new agreements and, because there is no end to how long compensation can be paid, means agreements will have to be made to support this.
Doing the Right Thing
There is a drive by Ofcom to enhance UK customer experience for services by making providers accountable, ensuring expectations are met, regardless of the cost.
The UK regulator seems cognizant that telecoms providers rush to the next, emerging technologies before ensuring existing services are fit-for-purpose for enough of the British public. Substandard 4G coverage is a case in point now mobile operators are already racing ahead to beat each other to the 5G finish-line.
Though telecoms services are not considered an essential utility, like water, gas and electricity, Ofcom seem to be encouraging providers to treat it as one.
The code can be accessed through the Ofcom website here.