Watch out for broadband’s hidden rip-offs

So it’s the new-year and you’ve set yourself a resolution to get your finances in check. Finding a cheap broadband deal seems like a great place to start – as long as you have a rough idea about the speed you need and whether or not you can put up with a download cap then comparing products is easy. Simply pick the cheapest for your needs and you’re on your way.

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At least, that is the theory. The reality however, suggests we need to look a little deeper when comparing products or we could be in for a nasty surprise.

Research from moneysupermarket.com has revealed that almost 4.5million households have been stung with hidden charges that line the broadband providers’ pockets with more than £160m in additional revenue. The survey shows that more than a quarter of customers (27 per cent) are falling foul of additional charges that are typically costing us an extra £36 a year.

The additional costs range from paper billing to non-direct debit payments, with charges for late payments and installations also adding to consumers’ woes. The survey reveals that BT’s customers are the hardest hit paying out an extra £51 a year, while Virgin Media (£42 a year), Sky (£35 a year) and AOL (£29 a year) complete the list of leading offenders.

It’s essential therefore, that broadband customers read through contracts thoroughly before agreeing to a deal.

What deals are available?

Certainly there is no shortage of deals to tempt new custom in the new-year, with Virgin Media offering perhaps the most eye-catching offer on the market with speeds at an incredible 50 megabits (Mb).

The package represents the first step from a broadband provider to move into the future thanks to a huge investment in its cable network. It is the first package in the UK to be available at such a fast speed – the previous best was offered by Be broadband at 24Mb, which costs £21.50 a month and you get one-month free if you sign up before January 5, 2009.

At 50Mb however, the Virgin product takes just 11 seconds to download a whole album although the real benefit comes when downloading TV shows or movies. However, such an impressive speed comes at a price – some £51 a month.

The deal will hold appeal to heavy users because when it comes to speed it simply can’t be beaten. Those who make heavy downloads such as internet gamers are likely to jump on this offer - although it is not yet available to everyone. The deal is currently only available in some areas although Virgin said it will be rolled out across the country by the summer. 

There is also some appeal to those who want to bundle the broadband deal with a phone or TV package. For phone and broadband users, the deal costs just £35 a month although you will also need to pay £11 a month for a Virgin phone line. For Virgin’s broadband and TV subscribers, the £66 a month deal is competitive – although only for the heaviest internet users.

If you don’t fit into the super-heavy internet user category then there is better value to be found elsewhere. Sky Broadband Max for example, is the third fastest broadband product on the market and is available for free for the first three months, costing £10 a month thereafter on a 12month contract. It offers speeds of 16Mb and truly unlimited usage – there is no fair use policy so you can literally download as much as you want.

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Indeed Sky’s products are very attractive to a range of users. Light internet users who are already Sky TV subscribers for example, could pick up the Sky Base broadband deal with 2Mb speeds and a 2Gigabyte (GB) download cap for free.

It is worth noting however, that Sky is increasing its prices in March. The Sky Broadband Base, Mid and Max deals will all increase by £5 a month meaning Sky Base will be available for £5 a month, Sky Mid for £10 a month and Sky Max for £15 a month. The only exception is if you are also signed up to the Sky Talk telephone deal – in which case the original pricing will still apply. The changes to the deals apply to all new customers who have joined Sky broadband since November 25, 2008.

What should you look for when shopping around?

The key to finding the right broadband deal for you is to think about how often you use the internet. If you rarely use the web – perhaps you just check emails and casually surf once a day – then fast speeds and large download caps are irrelevant. However, if you spend hours online each day then finding an unlimited deal and super-fast speeds will be important.

From there, think about if you could save money by bundling your broadband with another service – such as a phone, TV or mobile phone deal. You can use our broadband comparison tool to compare rates on both broadband only and bundled packages.

Finally, once you’ve found a deal that looks appealing ensure you read the small print before applying. Make sure you look out for:

  • Charges for paying by non-direct debit methods.

  • Charges if you exceed a download limit.

  • Costs for resolving technical problems.

  • Costs to cancel a contract or if you move home in the first 12 months.

  • Set-up fees.

Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing.

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