Magnifying the small print

EMBARGOED UNTIL 00.01 SATURDAY JUNE 16 2007

Over half of broadband users have not read the small print of their contract* The majority of people signing up for broadband (55 per cent) fail to look for extra charges and catches contained within contract small print and many fall foul of them, according to new research.

Most admit to being dazzled by the headline-grabbing 'lures' including free internet access, free modem, unlimited downloads and free installation rather than searching the small print.

The survey, by moneysupermarket.com, of broadband customers shows users often fall foul of fees they were unaware of in their contract.

The main surprise charges were late payment (36 per cent), contract termination (34 per cent), exceeding the fair usage limit (32 per cent), moving home (27 per cent) and helpline costs (25 per cent).

With Ofcom announcing an investigation into the fees charged by communication providers, moneysupermarket.com has taken a close look at contracts from 14 leading broadband providers.** Its research uncovered surreptitiously imposed small-print pitfalls and highlighted which of the providers have the least transparent contracts.

Jason Lloyd, head of broadband at moneysupermarket.com, said: "With so many offers out there it is very easy to be blinded by the headlines and enter into a contract without thinking about what it entails.

"Remember, if something looks too good to be true, it usually is.

Some providers will look to make their money in ways they are not so ready to tell you about upfront.

Our research shows over half of all broadband customers admit to not reading the contract before signing up.

It is definitely a case of 'buyer beware' with broadband, so read the contract before you sign up.

"While we support charges that are fair and protect the broadband provider from exposure to bad customers, we are against fees imposed without users' knowledge.

This 'hidden cost' can drastically affect a person's decision as to which provider they go with, so these additional charges should be clearer.

"Be, madasafish, Direct Save Telecom and AOL have done well with the most transparent contracts, while BT, Sky Broadband, Orange and Eclipse should make their small print a lot more user-friendly." Some 'contract quirks' include: Having no minimum contract term doesn't mean you won't pay a cancellation fee.

Direct Save Telecom and Be charge around £50 if you cancel in the first 12 months.

Eclipse charges £51 plus VAT if equipment isn't returned after you cancel your contract, while BT has a £45 fee.

Namesco charges £25 plus VAT for a failed payment.

Direct Save imposes a £14.95 disconnection fee for consistent late payments and a £14.99 charge for a failed direct debit.

BT and Virgin Media have similar fees of between £7.50 and £10.

Virgin charges £5 per month and Talk Talk £3.50 for non-direct debit payments.

Madasafish, Namesco and Be's unlimited product charge at between £50 and £80 to reconnect you when you move house.

Orange technical support calls cost up to 50p a minute.

Direct Save, Virgin, Sky and Be ask for between £24 and £40 in one off set up fees.

Free calls to UK landlines only applies to numbers starting with 01 or 02, not the commonly called 08 numbers.

Daytime calls to mobile phones can cost more than 20p per minute with Tiscali, BT, madasafish, Talk Talk and AOL.

Calls to European landlines with Pipex and Tiscali can be more than 50p per minute.

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