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New guidelines on advertising broadband speeds must be implemented to stop consumers from being misled, a group of MPs has said.

Under the existing system, broadband providers are allowed to advertise maximum speeds even if they are available to only ten per cent of customers.

According to the British Infrastructure Group, a cross-party group of MPs set up by former Conservative Party Chairman Grant Shapps, this means many consumers are signing up for contracts and getting a service that falls short of expectations.

The organisation is particularly concerned that consumers have very few rights and protections if the service they were promised bears little resemblance to reality.

As a result, it wants them to be given the power to hold their internet service provider to account if they feel let down or misled into signing a contract.

"BIG will be campaigning for mandatory refunds for anyone who has been mis-sold a broadband contract," the organisation said.

The report went on to state that other industries, such as banks and airlines, are required to compensate customers in the event of poor practice, delays and errors.

However, the BIG said this is not the case in the broadband market, with no minimum level of compensation available if customers receive a poor service.

The report added that consumers also need to be given the power to exit contracts if they feel they have been misled by claims in advertisements.

Speaking to Radio 5 Live, Mr Shapps said: "You might sign up for 24 megabits of download speed, find that you don't get anywhere near that, you can't get any compensation, you can't get out of the contract, and it seems to us this is completely the wrong way round."

The report comes just after Culture Minister Ed Vaizey criticised the UK advertising code for allowing broadband providers to potentially mislead customers.

Speaking to the Culture, Media and Sport Select Committee, he said allowing companies to advertise their top speeds even if they are available to just ten per cent of their customers is "ridiculous" and "a complete and utter joke".

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