How to understand your broadband contract

How to understand your broadband contract

When you sign up to a new broadband deal, either because you're switching to a new provider or renewing with your current one, you will have to sign a contract.

This contract sets out all the terms you're agreeing to - not just your obligations, but those of your ISP as well.

And while it's tempting to just give it a quick glance over before you sign, that's not a great idea. Not every provider has the same terms, so if you're committing for as long as two years, you need to know what you're agreeing to.

Here are a few of the things you should look out for in your broadband contract.

Basic terms

The main gist of a contract is to set out the basics of your deal: what service you're getting, the length of the initial contract period and the start and end dates, the price, the availability of support, and so on.

Although you should obviously read the contract before you sign it, you do get a 14-day cooling-off period should you change your mind afterwards. We wouldn't recommend treating it like a try-before-you-buy scheme, but it does at least give you immediate protection against buyer's remorse.

Price and price rises

When you're looking for a new broadband deal, the headline price is likely to be the main figure you'll focus on to see how much a plan will cost. But there are other charges that you may have to pay as well. And while Ofcom rules state that they should all be made clear, and not hidden in the small print, you can still overlook them.

The main thing to look out for is information on mid-contract price rises. Annual increases in line with the consumer price index are allowed; anything above that, and not specified in your contract, means you can potentially walk away from your deal without penalty.

Recently, BT, Plusnet, EE and John Lewis have all introduced a policy of annual rises equal to the CPI inflation rate plus 3.9%. This will be in your contract, so you won't be able to complain when it happens.

In addition, installation, activation and postage fees are all pretty common, and they can range anywhere from £5 to £50. It's important that you know which end of the scale your deal sits.

And be aware of any other additional costs that you might not be expecting. Among other things, they might include:

  • extra charges for choosing to pay by a method other than direct debit
  • late payment penalties
  • paper billing costs
  • fees for moving house

Equipment and installation

Your broadband contract will outline important information about the equipment you'll get, and any installation process involved in setting up your new connection.

Every provider will give you a new router when you take out one of their packages, and sometimes it'll be yours to keep and other times it'll just be a loan. In the latter case the contract will tell you how to return it when your deal ends, whether you need to keep the box, and any other relevant details. Warranty info should also be included here.

Most broadband services don't need any specific installation, you can just plug in your router and get on with your day. But if you're going with Virgin Media or a full fibre provider like Hyperoptic, then the install is often a lot more involved, with an engineer needing to visit your house.

Speed and performance

When you sign up to a new broadband deal the provider will give you a speed estimate so you know exactly what level of performance you can expect. Make a note of this figure because it might not be the same as the average speed that they advertise.

Make sure you're happy with estimate before you sign up, especially if it's a lot lower than the advertised rate. It will also enable you to make a claim for compensation in future if the performance drops below what you've agreed to.

Other than that, keep an eye out for:

  • details of any speed guarantee, and what you can do if it isn't met
  • usage restrictions like data caps, fair use policies and so on, although these are fortunately quite rare now
  • an acceptable use policy, standard across all providers, that bans you from doing anything illegal on the network
  • whether or not you can use your own router - you probably can, but you might not get any support for it

Special offers

A lot of broadband suppliers entice new customers with special offers including vouchers and assorted gifts. In most cases, these won't be delivered to you automatically. You have to claim them, and do so within a specified time frame.

Read more on how to claim your broadband rewards.

The end of your contract

Broadband contracts last between 30 days and two years. Your contract will outline what you can do if you want quit early. In the case of the short term deals you usually just have to give a month's notice. For longer plans, you'll have to pay a termination fee, which will be a proportion of whatever is left on your contract.

But do remember that you are legally allowed to quit your contract if the service you're getting isn't up to scratch.

Once your contract period has ended, your broadband service will continue as normal. However, many of the protections specified in the deal will no longer apply. This is especially true of the price, which is very likely to go up, and which is why you should never stay on an out-of-contract deal for long.

Are you ready to start shopping for better broadband? Use our postcode checker to find the best deals available where you live.

Posted by Andy Betts on in Features

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