Fairness must come first

Speech by Sharon White at Ofcom/Which? fairness event, 3 June 2019

Good morning.

Ofcom and Which? both exist to serve the public. We’re a regulator and our primary duty is to further the interests of consumers. And Which? has campaigned for consumers’ rights for more than 60 years.

Today, we’re all here to talk about fairness for customers. And I’d like to start with one person’s story. We recently took a call from a lady in Cornwall who ordered a landline for her small business

First, she was told she could have a ‘brand new line’. But then her old one needed to be reconnected. And it didn’t work.

She was told her new line should be working fine. But whenever she tried it, there was no dial tone.

So she was then told to pay £300 for an engineer. Every time she called, she explained her speech was slightly affected by cerebral palsy. Each time the response was: “Do you realise this number is for business customers?”

“I’m not stupid,” she explained. “I’m entitled to have a business and have cerebral palsy.”

Thankfully, our caller did eventually get a helpful engineer who fixed the problem. But what happened to her wasn’t just bad for her business, it was really upsetting personally.

That’s why fair treatment is so important.

Decent broadband and mobile services have become so vital to our personal experiences, and to our working lives, that great service cannot be optional. It has to be the norm.

That hasn’t always happened. We’ve seen too many examples of things going wrong for customers – from poor information, to unfair prices.

But in the last few months, I’ve sensed a real mood change within our major providers, who are all here today.

A growing belief that the whole culture of the industry needs to be about putting customers first. And a willingness to invest more time and money in customer service.

I realise some people will say that means less to spend on 5G and full-fibre broadband.

That you can have investment or great customer service, but you cannot have both. But for me, it’s quite the opposite. The two have to go hand in hand.

Because for our sector, in today’s ‘experience economy’, coverage and quality really are the customer experience. Faster speeds, lower faults and great service – they all cut complaints.

And with social media, word-of-mouth is more important than ever. We’ve listened to about 100,000 Twitter and Facebook posts about telecoms. Customer service came top of the list. And it was the subject that made people most emotional.

No wonder the Institute of Customer Service doesn’t just measure complaints. It also tracks companies’ emotional connection, their ethos and ethics.

Does a customer feel a company cares about them? Is their provider open, honest and wanting to ‘do the right thing’?

I want every customer in our industry to answer: ‘Yes’.

We’re announcing today that all our biggest broadband, pay TV, home phone and mobile companies have signed new fairness pledges.

These are really important commitments that tell every customer what to expect from those companies. They mean fair deals and a good service. Clear information and helpful support for every customer.

Treating customers as we expect to be treated ourselves. The good neighbour principle. It’s a golden rule for customer service, which puts fairness first.

Fairness for customers is our number-one priority. So we’ve ensured money back when things go wrong, without you having to fight for it. And a guaranteed broadband speed before you sign up. These put power in the hands of customers. Including long-standing ones who might be paying too much.

That’s often described as a ‘loyalty penalty’. But as we’ve analysed handsets and broadband pricing, it’s clear that phrase doesn’t capture the complexities of the market.

We’ve examined tens of millions of customers’ tariffs – including bundles and single services. And what have we found?

The cost of confusion

We’ve seen some practices that are just unfair. Like higher prices for older customers who are stuck on copper broadband. That is simply not right. So, we’re reviewing how companies set their broadband prices, and we’ll publish our plans later this year.

But the wider market is more complicated. Some broadband companies charge more to long-term customers who sign a new deal. Others are offering them their best deals.

In mobile, the situation is different again. Many long-term customers are actually getting better deals than new customers. For people who pay monthly for their mobile handset, more than a quarter would pay more if they switched to a similar SIM-only deal tomorrow.

So should there just be one price for everyone?

Well, that could mean new customers end up paying much more. At least two in five broadband customers have agreed new terms with their provider. In that situation, they could end up paying more too.

Worse, it would mean that no new companies could come in and undercut on price.

These are serious, complex issues, and we will act on what the evidence tells us.

Where people are losing out, it’s usually not because they’ve stayed with their provider for a long time. It’s because they haven’t engaged with them for a long time.

They might be happy with their contract. Or they might be confused, or lack the confidence to ask their provider. Worse, they might be completely unaware that their initial contract is up.

What we’ve identified is not a penalty for loyalty. It is the cost of confusion among customers. And the cost is often high. It’s something I personally feel very strongly about.

By working together – industry, regulator, consumer groups and the Government – that is what we must tackle.

From Ofcom’s side, we’ve recently set new rules so companies must tell customers when their contract ends, and explain their best deal.

Our next priority is mobile handset pricing. We’ll announce our plans shortly, with proposals on broadband pricing to follow later this year.

Wherever we see customers being treated unfairly, we will step in.

Tackling the cost of confusion is not a simple issue. So we’ll ensure our rules are targeted and effective. And we’ll monitor today’s commitments, to make sure our industry builds on recent progress – and goes further on quality of service.

There’s still much to do. But I do think we’re at a turning point. Companies are ready to treat customers as they would be treated.

From now on, fairness must come first.