Citizens Advice has urged Ofcom to stand its ground and introduce a mandatory automatic compensation scheme for broadband customers.
Earlier this year, Ofcom proposed new regulations which would require telecoms firms to automatically pay out to customers if they experience missed deadlines, slow repairs, or if an appointment is not kept.
The regulator believes this could result in as much as £182 million in extra compensation being paid out annually, with households set to get £30 if they wait in for an engineer, only for them to fail to arrive or for the appointment to be cancelled at short notice.
BT, Virgin Media and Sky responded by jointly proposing a voluntary scheme in which providers could determine when consumers should be compensated and how much should be paid out.
Citizens Advice is concerned that this option would be worse for customers than the original proposal, as the total size of the payouts would be at least £52 million - or 32 per cent - lower.
The organisation has therefore called on Ofcom not to back down in the face of industry pressure.
Gillian Guy, Chief Executive of Citizens Advice, commented: "A watered down compensation scheme would shortchange customers by millions of pounds.
“Ofcom was right to propose a mandatory scheme to automatically compensate customers when they get a poor service from their provider.
"This should put an end to consumers having to negotiate with their provider to get the compensation they deserve.
Guy urged Ofcom to "hold its ground" and introduce a compulsory automatic compensation scheme that "clearly lays out how much consumers are entitled to when they get poor service, with the amount providers have to pay reflecting as closely as possible the detriment faced by consumers".
She went on to stress that broadband is now an essential service, with households relying on it for everyday activities.
This, she stated, means the lack of a working service can make day-to-day tasks "much more difficult".
Grant Shapps, Chair of the British Infrastructure Group (BIG), added that the broadband sector has consistently failed to compensate consumers who receive a poor service.
"That’s why BIG is calling for ministers to stop dilly-dallying and use the powers that parliament has provided to guarantee compensation for households who are fed up with not receiving the internet service they’ve paid for," he said.
This was a key recommendation of the BIG's recent Broadbad 2.0 report, which said the voluntary agreements currently in place between broadband providers and Ofcom to ensure customers are compensated for poor service "do not hold providers to account".
However, the report stressed that an automatic compensation scheme will only be effective if customers know about it.
This, it argued, means broadband companies must "take responsibility for communicating details of their procedures for making complaints and claiming compensation in a clear and concise manner, in order to improve accountability and transparency in the telecoms sector".
According to figures from Citizens Advice, just 15 per cent of consumers who complain to their telecoms providers get any kind of financial compensation.
This compares with 30 per cent of those who complained about other essential regulated services, such as water and energy.