Joint research commissioned by us and the communications regulator, Ofcom, reveals that the current approach to presenting pricing in fixed broadband ads is likely to confuse and mislead consumers about the true cost of broadband deals.
In response, we will raise these issues with broadband providers in order to bring about change, by 30 May 2016, to the way broadband pricing is advertised so that consumers are not misled.
The objective of our research was to test consumers’ likely understanding, based on viewing current ads, of the presentation of pricing offers in typical broadband ads - most commonly those featuring the price of the broadband itself and the monthly line rental alongside it. Our research looked also at the presentation, and likely consumer understanding of additional pricing elements such as introductory deals, discounts, activation, delivery charges and the length of the contract.
The research reveals that:
- 23% of participants correctly identified the total cost per month after the first viewing of an ad when asked simply to recall as much information as they could about the deal on offer without prompting
- In response to the same question, 34% of the total sample recalled pricing information, but only provided partial information or an incorrect figure for the broadband service or line rental costs
- 22% of participants, were still not able to identify correctly the total cost per month after the second viewing (If this proportion were reflected across the population of fixed broadband subscribers, this would mean around 4.3 million UK households being unable to figure out what they would be paying)
- 64% of those who couldn’t calculate the total cost per month, despite a second review, thought the headline price for the broadband element of a package constituted the total cost per month and that line rental costs did not apply
- 81% of the sample were not able to calculate correctly the total cost of a broadband contract when asked to do so.
- 74% of the total sample believed that information about one-off and on-going costs after an introductory period was either fairly or very unclear.
Based on the findings, we consider that the current approach typically taken by advertisers – where prices for several elements of the offer (broadband, introductory offer, line rental, contract length) are presented separately – is likely to mislead consumers and therefore, from 30 May, will in all likelihood break the rules.
While we remain open minded as to how pricing should be advertised so as not to mislead consumers, we will suggest to broadband providers that they advertise:
- All-inclusive up-front and monthly costs; no more separating out line rental
- Greater prominence for the contract length and any post-discount pricing
- Greater prominence for up-front costs
We will decide on a final recommended approach on advertised pricing offers and communicate it to industry and the public before 30 May.
We’ll now be moving quickly, working alongside broadband providers, to clarify the presentation of price information.
Guy Parker, ASA Chief Executive
Publishing our research and outlining our next steps, ASA Chief Executive Guy Parker said: “It’s essential we make sure people aren’t misled by pricing claims in broadband ads. That obviously wouldn’t be good for them, but nor would it benefit broadband providers, because advertising works better when it’s trusted. We’ll now be moving quickly, working alongside broadband providers, to clarify the presentation of price information.”
...many people are confused by complicated adverts and offers, so we welcome the ASA’s plans to simplify broadband advertising.
Sharon White, Ofcom Chief Executive
Sharon White, Ofcom Chief Executive, said: “Ofcom wants to see clear and accurate broadband prices for consumers. Our research with the ASA shows many people are confused by complicated adverts and offers, so we welcome the ASA’s plans to simplify broadband advertising.
Ofcom has already introduced measures to ensure customers receive accurate information on broadband speeds when they take out a contract. We’ll continue to work with industry and other regulators to ensure that broadband customers are treated fairly and have the best possible information to make the right choices.”