We have confirmed today [Wednesday 4 May 2016] we’re strengthening our approach to advertised fixed broadband price claims to avoid customers being misled. The new approach will come into force on 31 October 2016.
In January, we published joint research with Ofcom which found that the current approach to presenting pricing in fixed broadband ads is likely to confuse and mislead consumers about the cost of broadband services.
The research tested consumers’ likely understanding of the presentation of pricing offers in current broadband ads including line rental. Participants found it difficult to calculate the true cost of a contract when presented with these ads where the different elements - broadband, introductory offer, line rental, contract length and one-off costs - were presented separately and some elements given greater prominence than others.
Only 23% of participants could correctly identify the total cost per month after the first viewing of the ad. 22% of participants were still not able to identify correctly the total cost per month even after a second viewing of the ad. 81% of participants were unable to calculate correctly the total cost of a broadband contract when asked to do so.
Since January, we have been engaging with industry and other key stakeholders, including consumer groups, on this issue. This includes seeking feedback on proposals to address the difficulties participants reported in our research to help us agree on a new approach.
From 31 October 2016, this kind of broadband advertising is likely to break advertising rules.
In order for broadband providers to ensure they stay within the rules, we recommend that future broadband ads which include price claims should:
- Show all-inclusive up-front and monthly costs; no more separating out line rental
- Give greater prominence for the contract length and any post-discount pricing
- Give greater prominence for up-front costs
Commenting on the announcement, Chief Executive of the ASA, Guy Parker, said:
This new tougher approach has been
developed to make sure consumers
are not misled and get the information
they need to make well-informed choices.
Guy Parker, ASA Chief Executive
“We recognise the importance of broadband services to people's lives at work and at home. The findings of our research, and other factors we took into account, showed the way prices have been presented in broadband ads is likely to confuse and mislead customers.
“This new tougher approach has been developed to make sure consumers are not misled and get the information they need to make well-informed choices. We’ll support the broadband industry as they move towards changing their approach in time for the October 31 deadline.”