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Hidden broadband ‘cessation’ charges

We explain why you may have to pay a fee to leave your broadband provider even if your contract has long since run out.

Most of us accept that if we’ve signed up for a broadband deal and are still under contract, then we’ll have to pay a fee to get out of it. Yet Which? research has found you could still be charged to leave your provider even if your contract ended months ago.

Customers can be hit by this little known fee – often called a ‘cessation charge’ – if they cancel their broadband account without switching providers, or if they switch providers without supplying a Migration Authorisation Code (MAC).

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New switching rules

The rules regarding MAC requirements can be confusing. There may be no need to supply one, but it’s difficult to know if this applies to you. The telecom regulator, Ofcom, is overhauling the switching process: from June, you won’t have to supply a MAC yourself – your new provider will handle the entire switch.

Yet despite Ofcom’s changes, you can still be hit with cancellation fees outside of contract if you decide that you simply want to end your broadband service. There could be any number of reasons for deciding to do this. You could be moving overseas, or you may simply decide that you no longer need a broadband connection. Whatever the reason, the result could be the same – an unwanted charge that feels unfair.

Which providers charge these fees?

BT and Plusnet are two of the biggest broadband providers that charge their customers cessation fees. But they’re not the only ones – EE Broadband, John Lewis Broadband and Utility Warehouse also have similar policies.

The providers say the charges cover the costs they incur in recovering equipment from the telephone exchange and in amending records when a broadband line is cancelled. However not every provider applies them – ISPs, such as Sky and Virgin Media, don’t charge customers to leave, as long as their contract has expired.

Are these fees fair?

In 2010, Ofcom looked into the issue of additional charges made by phone, internet and pay-TV providers. It concluded that cessation fees can be considered fair as long as they’re based on the actual costs that come with cancelling a service, and that the charge is made clear to customers before they sign up to a contract.

While ISPs do explain their cessation fees on their websites and in their terms and conditions, these are often tucked away and can be hard to find. Even if you do come across them, the fees can easily be confusing. For example, TalkTalk’s T&Cs state it charges a £40 cessation fee. Yet a spokesperson we contacted told us this no longer happens.

Which? says

We believe that ISPs should stop levying such charges once customers’ contracts have ended. This makes switching providers easier, and it’s fairer for people who’ve finished their contracts.

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