Consumer harm from poor customer service in the energy and broadband sectors

Introduction

“It is stressful enough finding the right number to call and then you are passed from department to department, none of which appear to share records or communicate with each other. Multiple phone calls which take ages to be answered. It’s not good” Case study tool - Female 55-64 yrs old

Engaging with customer service is something almost every consumer has to do at some point. It’s unavoidable that we will have questions to ask or problems that need resolving with many of the products and services we pay for. This makes customer service a highly important part of what businesses offer, especially where something has gone wrong and consumers need a resolution.

However, we have seen increasing evidence that consumers are too often let down when they try to get in contact with businesses. Our own recent work has repeatedly uncovered substantial customer service issues across a range of sectors. And there are signs that the problem is getting worse rather than better. According to the Institute of Customer Service (UKCSI), satisfaction with customer service is at its lowest in nearly a decade, with sectors like utilities, transport, insurance and services seeing the biggest declines. 

In particular we have concerns about the extent to which consumers are being harmed by customer service problems in essential services. Almost all UK households pay for energy  or broadband, and when something goes wrong it can seriously impact consumers’ day-to-day lives. There is an important imperative for good customer service, and yet evidence suggests both energy and broadband customers get highly variable levels of service and often find themselves on the end of bad experiences. The energy and broadband markets are also characterised by low levels of engagement as many consumers feel daunted by the prospect of moving supplier or provider. That can mean consumers feel stuck with poorly performing providers, and providers themselves facing limited incentives to improve.

We conducted this new research to advance our understanding of the scale of the problem. What are the nature of customer service problems consumers are experiencing in the energy and broadband markets, and how large are the harms they face?

Our research

In December 2023, as part of our Customer Service Counts campaign, we launched a new tool on the Which? website for members of the public to tell us their stories of poor customer service (the source of all verbatims in the report). Since then we have received and analysed thousands of stories directly from consumers, and identified a set of the most common types of problems consumers have when getting in touch with companies. Typically, these fall into two groups: firstly issues with how long it takes to reach someone who can help, and secondly issues with how long it takes to reach a resolution. The most common problems consumers face under these two themes are summarised in Table 1 below. 

Table 1: Problems associated with contact and resolution

All of these common problems can cause harm. Consumers frequently told us of the time they wasted, the negative emotional impacts, or the financial losses they suffered. For example, one consumer described spending hours on hold only to be disconnected twice without resolution. Another expressed feeling upset after multiple attempts to get help. We also had concerns about consumers abandoning attempts to resolve issues because of their bad experiences and being left out of pocket. 

"I moved home and had a bill for £1,000 for one day’s use. I phoned my provider lots of times, waiting on the phone, being passed around. It was a horrible experience that really upset me." Case study tool - Female 65+

To explore these three types of harm - time, emotional and financial - in more detail, we conducted a nationally representative survey of 4,101 consumers to ask about their experiences of contacting energy or broadband companies in the past 12 months. Yonder, on behalf of Which?, conducted an online survey of 4,101 nationally representative adults aged 18+. The survey was conducted between 3rd and 15th May 2024. Further details on methodology are included in the technical annex.

In the rest of this report, we focus on the findings from that survey. Firstly, we look at the incidence of problems faced by those who contacted their provider. Then we explore how those problems are causing time harm, emotional harm and financial harm in turn.

Chapter 1: Incidence of customer service problems in energy and broadband

We find it is very common for consumers to contact their energy or broadband providers. 45% of UK adults have contacted their broadband provider in the last year, and 42% their energy supplier. In total, this equates to 33 million people who have sought support from both or either in some way. 

We asked those who had made contact with their provider whether they had encountered any of a list of nine common problems with customer service, which we identified from the stories submitted through our online tool:

1. I couldn't reach customer services despite continuous attempts
2. I waited a long time on the phone before speaking to an advisor
3. My call disconnected after being in a long waiting queue
4. There were long delays in receiving a response to my email
5. I didn’t receive a response from the provider to my email
6. I was passed between departments without receiving a helpful response
7. I spoke to unhelpful or dismissive advisors
8. I wasn't given good advice or support from the advisor
9. I was given false promises by the team

We found a similar incidence of each of the specific problems across both sectors (Figure 1). The most common problem in both is waiting a long time to speak to an advisor, experienced by 17% of people contacting their energy supplier, and 19% of those contacting their broadband provider. We see a similar pattern across most of the rest of the problems. For example around one in 10 energy and broadband contacts experienced being passed around departments, not getting good support from the advisor, or speaking to unhelpful or dismissive advisors. The biggest divergence between the sectors was receiving long delays to email, which happened in 10% of energy contacts but 6% of broadband contacts.

Figure 1: Problems experienced by energy and broadband customers making contact with their provider

In total, amongst those who made contact, around 2 in 5 consumers faced at least one of these customer service problems in both energy (39%) and broadband (38%). This amounts to 14.8 million consumers experiencing 39 million problems across a single year.

Chapter 2: Time harm

Consumers often waste time when they experience problems with customer service. Many of the problems we identified through our research involve consumers spending too much time getting through to their energy or broadband provider or having their time wasted by inadequate service once they do manage to make contact with someone. 

“The representative was quite dismissive of the problem. They said there was nothing they could do. I spent an hour on the phone and felt frustrated that there was no solution to the problem” Case study tool - Female 65+

Wasting time, alongside the emotional impacts of having a bad experience, are some of the most widespread ways that consumers experience harm during contacts with their providers.  Around nine in 10 of the customer service problems we asked consumers about involved having their time wasted (90% of energy problems and 93% of broadband problems). In total over a third (35%) of people who contacted their energy provider reported having at least one problem that wasted their time; and a similar proportion for those contacting their broadband provider (36%).

Table 2: Number of problems that caused time harm for consumers

Where we could make an estimate of how much time was wasted, the average time consumers reported was around 45 mins to an hour depending on the problem. By far the most common time-wasting problem that consumers had with customer service was waiting for a long time on the phone before speaking to an advisor. Consumers who had this problem reported wasting around 40 minutes of their time on average, and in total across both broadband and energy consumers wasted 5 million hours waiting to speak to an advisor. Consumers also have substantial amounts of time wasted after they actually make contact and have poor experiences with advisors. Those who speak to unhelpful or dismissive advisors waste about an hour of time (59 mins) on average, similar to those who reported not getting good support (63 mins) and being given false promises (75 mins). 

In total, we estimate that consumers experienced time harm in 17.3 million customer service problems with their energy supplier and 18.3 million problems with their broadband provider in the past year. On average, those experiencing their time wasted lost almost 2 hours (112 mins) of their time due to energy customer service problems and 1 hour 38 mins of their time due to broadband customer service problems.

This means in total, we estimate that consumers spent 13.9 million hours on customer service issues in energy, and 13.4 million hours on customer service issues in broadband over a year. 

When consumers waste their time on customer service problems, they are losing hours that they could be dedicating to leisure, family commitments or work. The Department for Business and Trade’s (DBT) Consumer Protection Study provides a framework for valuing (in £ terms) the time losses that consumers experience as a result of problems with businesses. On average, an hour’s time in 2023 values is worth around £16 per hour, using a combination of mean wages and proxy wages for unpaid work (see technical annex for more details). Applying this value to our estimates of time wasted, we estimate the total time detriment from customer service problems per year is a combined £436m across energy (£223m) and broadband (£214m). 

Chapter 3: Emotional harm

Encountering problems with customer service can have a detrimental impact on consumers' emotional wellbeing. The vast majority of customers encountering problems reported at least some emotional impact on them (94% of those having energy or broadband problems). In total, we estimate that 8.9 million energy consumers and 9.2 million broadband consumers experienced emotional harm as a result of poor customer service.

Over half of respondents that experienced at least one problem reported feeling frustrated as a result (55% of those having energy problems, 57% of those having broadband problems). In addition, around half of consumers who experience a problem with either their broadband or energy provider reported feeling annoyed or irritated (Figure 2).

“After almost an hour on the phone I felt frustrated that no solution to our problem was forthcoming.” Case study tool - Female 65+

In a substantial minority of cases, consumers who had problems experienced more severe types of emotional harm. Around a quarter of those with problems (25% in energy and 29% in broadband) reported feeling angry and a fifth reported feeling helpless (21% in energy and 19% in broadband). 

“I cancelled my broadband and telephone line contract on 10 March 2024. I am out of contract but the contract is still not cancelled. I called them several times. The last call got cut off after almost 40 minutes. I feel helpless!” Case study tool - Male 65+

“I had to contact customer service via my mobile phone, which is a pay-as-you-go, so it cost in the region of £50 to £70 as I was passed from one department to another and kept waiting. It took two months to get it resolved and no compensation. I kept a running list of what I did and also recorded the conversations. It made me feel stressed, anxious, frustrated and angry. ” Case study tool - Male, 65+

Concerningly, more than one in ten of those with problems reported feeling upset or distressed. Again, we observed very similar levels of incidence of these feelings across both sectors, with 14% and 15% of those who had a problem feeling upset in energy and broadband respectively, while 12% and 10% felt distressed. These worrying findings show how customer service failings can lead to quite severe levels of harm in a minority of cases.

Figure 2: Proportion of respondents with problems experiencing various degrees of emotional harm

We also find that some problems are more likely to lead to more severe emotional harm than others, and that consumers who experience multiple problems are more likely to experience emotional harm as a result. Firstly, feelings of helplessness and upsetness were most commonly reported amongst customers who did not receive a response to their email (43% feeling helpless and 41% upset) or spoke to an unhelpful or dismissive advisor (38% helpless and 33% upset). Amongst those who experienced three or more problems with their energy provider’s customer service (11% of those making contact); 

• 53% reported feeling angry,
• 38% helpless, 
• 32% anxious, and 
• 24% distressed.

The problems consumers experience also have an impact on the trust they feel with their providers’ ability to deal with their problems. Almost half (47%) of consumers who had a problem with their energy provider felt like they had been forced to give up trying to resolve their issue, and 46% that their provider was deliberately making it difficult for them to reach a resolution (respective figures for broadband were 44% and 47%). Not only could these feelings undermine trust in the broadband and energy sectors, but they could lead to further harm if consumers feel put off from attempting to resolve problems in the future. Seven in 10 consumers who had a problem with customer service told us they were at least a little put off from contacting customer service in the future (70% for energy and 69% for broadband).

Chapter 4: Financial harm

In some instances, poor customer service can lead to consumers suffering financial losses. Consumer problems with providers can lead to consumers being out of pocket, if e.g. they’ve been overbilled or missold a contract. We cannot attribute all of those losses to bad customer service, however in some cases a poor customer service experience could contribute to the financial harm.

Financial harm from abandoned problems

In the energy sector, 17% of consumers contacting their energy provider said they gave up seeking a resolution due to problems they experienced with the customer service. Almost a third (32%) of these consumers said that this left them financially worse off. On average they estimated they were £137 worse off as a result. 

In total, we estimate that 1.2 million energy customers were left £166 million worse off due to a customer service issue with their provider causing them to give up seeking resolution to a problem.

We see a similar picture in the broadband sector, where 14% of consumers contacting their broadband provider said they gave up seeking a resolution due problems they experienced with the customer service. 29% of these consumers said that this left them financially worse off, and on average they estimated they were £93 worse off as a result.

In total, we estimate that 950,000 consumers were £89 million worse off due to giving up speaking to their broadband provider.

Financial harm from not seeking resolution at all

A small proportion of consumers (1 to 2%) did not even contact their energy or broadband providers due to previous bad experiences with their customer service. Some of these consumers reported being financially worse off as a result. This adds an additional £37 million to consumers being worse off due to poor customer service in the energy sector and an additional £6 million in the broadband sector.

Total financial losses from customer service issues in energy and broadband

In total, we estimate that UK consumers were £203 million worse off due to bad customer service in the energy sector and £94 million worse off due to bad customer service in the broadband sector (Figure 3).

Figure 3: Total financial losses from poor energy and broadband customer service

Conclusion

Customer service problems in energy and broadband are causing substantial levels of harm to UK consumers. Currently more than four in ten people who contact their energy provider or broadband provider experience at least one problem during the process, leading to 14.8 million consumers experiencing 39 million problems in total across a single year. 

Across these problems, consumers wasted a shocking 27 million hours - over 3,000 years - of time between May 2023 and May 2024 that could otherwise be spent on work or leisure. Customer service issues also leave consumers feeling frustrated, annoyed and irritated. And in a substantial minority of cases, consumers feel anxious, upset or even distressed because of their experience. Furthermore, a minority of consumers are being left out of pocket as a direct result of bad service experiences with their providers to the tune of £300m a year.

Clearly the quality of customer service being offered by these providers of essential services is not good enough. Firms should provide a range of easily accessible contact methods, problems should be resolved in a timely and efficient way, and customers should be treated with empathy and care. It’s clear that many businesses are failing to deliver against these basic criteria. While we welcome the action taken by some firms to improve their customer service, and urge others to follow suit, it's clear from our recent research that changes are yet not being felt by customers.

New investment or initiatives must lead to more significant and tangible change for customers faster, and tackle the issues they are struggling with the most. We will be closely monitoring businesses' customer service performance over the next six months to see whether changes made have an impact.

Elsewhere, firms who have done nothing to improve their performance must take urgent action to address the problems their customers are facing.

Technical annex

Our survey approach

Yonder, on behalf of Which?, conducted an online survey of 4,101 nationally representative adults aged 18+. The survey was conducted between 3rd and 15th May 2024.

We asked respondents if they had contacted companies across nine different sectors in the last 12 months. The data is therefore reflective of customers’ experiences between May 2023 and May 2024. Those who had contacted their energy or broadband provider were then asked further follow-up questions to understand the harms faced.

To calculate time, emotional and financial harm, we first asked respondents which problems, if any, they had experienced when contacting their energy or broadband provider in the last year. Respondents selected from a pre-determined list of problems that we identified through our online case study tool. There was a ‘Not applicable - I do not experience any problems with their customer service’ answer option for respondents to opt out. 

1. I couldn't reach customer services despite continuous attempts
2. I waited a long time on the phone before speaking to an advisor
3. My call disconnected after being in a long waiting queue
4. There were long delays in receiving a response to my email
5. I didn’t receive a response from the provider to my email
6. I was passed between departments without receiving a helpful response
7. I spoke to unhelpful or dismissive advisors
8. I wasn't given good advice or support from the advisor
9. I was given false promises by the team

Secondly, we followed up with the respondents who had experienced at least one problem when contacting customer services. They were asked a series of questions that included how they felt as a result of experiencing these problems (emotional harm), how much time, if any, they wasted in minutes for each of the problems experienced (time harm), whether they gave up seeking a resolution as a result of the problems, and whether they were left financially worse off as a result (financial harm), and if so, by how much in £s.

In addition, respondents who had not contacted their energy or broadband provider were asked if they had an issue that needed customer service support but they chose not to contact due to a prior bad experience, and were they left financially worse off as a result (financial harm), and if so, by how much in £s.

Our estimates have been scaled up by the UK adult population estimated by the ONS. 

Valuing time harm

For each problem experienced we asked respondents how much time, if any, they wasted in minutes for each of the problems experienced on the following answer scale:

1. I did not waste any time doing this
2. 1-15 minutes
3. 16-30 minutes
4. 31-45 minutes
5. 46-60 minutes
6. Over 60 minutes
7. Don’t recall

Those selecting over 60 minutes were asked a follow-up question to specify the exact amount (up to 5,000 minutes). A mean amount of time for each problem was then calculated. This was done so by taking the midpoint value from each time range. Values entered at the follow-up question for over 60 minutes were used. However, if respondents entered over 10 hours (600 minutes), their responses were trimmed to 10 hours.

To value time in monetary terms, we used the approach taken in the Department for Business and Trade’s Consumer Detriment Study. This takes a combination of mean wages in the economy and a proxy wage derived in prior HMRC research. For our research we have updated those figures to 2023 values, using the most recent estimates of mean wages from the Office for National Statistics’ Annual Survey of Hours and Earnings, and wage growth and employment figures in the Labour Force Survey.