Broadband customers have overpaid by an estimated £251m in so-called loyalty penalties after a third failed to receive notifications about the end of their contract, a switching website claimed.
Polling by Uswitch found that a third of those whose contracts had ended between February and November last year reported not receiving a warning.
This is despite new rules coming into force last February requiring firms to write to their customers ahead of their contract coming to a close so they could negotiate a better deal.
Uswitch said that being on an expired tariff costs the average bill payer £90 a year, meaning the potential overpayment over a whole year could be as much as £251m.
Ispa, the trade body for internet providers, said it was aware that Covid-19 had caused issues early on but that these should have been resolved.
Ofcom, the regulator, said in April that it would not issue enforcement action against firms who failed to comply with the new rules because of the pandemic. This grace period ended in June.
Uswitch said that customers had either not received notification their contract was ended or had missed it. In the latter case it said that the language used may not be “urgent” enough and people may not have realised the significance of the letter or communication.
Richard Neudegg, head of regulation at Uswitch.com, said: “Millions of broadband customers have received an end-of-contract notification or reminder in the last year, and it’s great to see that the vast majority have acted to get themselves a better deal.
“However, the fact that a third of consumers whose contract was due to end say they didn’t, or couldn’t recall, receiving an end-of-contract notification should ring alarm bells.”
Andrew Glover, chair of Ispa, said: “While the £251 million figure touted by Uswitch is only hypothetical, they are right to highlight the importance of end of contract negotiations.
“Providers have been sending these out since last year to make it easier for their customers to determine whether they are on a contract that best serves their needs.
“We are aware that Covid-19 may have led to some issues early on but by now all relevant customers should have received those notifications and we urge individual consumers at the end of their contract to look out for the communication from their internet service provider.”
An Ofcom spokesman said that it did not recognise the Uswitch figures but that it is “important companies comply with these rules”.
He added: “We’re closely monitoring the impact of these notifications – including collecting data directly from providers – and will report on our findings this year.”