ASA Proposes New Rules To Stop ‘Misleading’ Broadband Advertising

The Advertising Standards Authority (ASA) has said the majority of broadband advertising is likely to be against new rules set to be introduced from 30 May, after joint-research with Ofcom found many consumers are unable to determine the total costs of a package because of ‘misleading’ practices.

The typical approach within the broadband industry is to separate the cost of service from elements such as line rental and one-off fees such as equipment and installation, or to disguise the total cost of the contract by promising one monthly fee for only part of the total contract.

For example, ad headline figure of ‘£19.99 per month’ might not include line rental or only apply for 12 months of an 18 month contract.

Misleading broadband advertising

Just under a quarter of respondents to a survey were able to correctly recall the total cost per month of an advert when asked, but 22 percent were still unable to do after a second viewing. Two thirds of the latter figure thought the headline cost was the total amount and that line rental didn’t apply.

Four fifths could not correctly calculate the total lifetime cost of a contract and three quarters felt the communication of one-off and ongoing costs was very unclear.

“It’s essential we make sure people aren’t misled by pricing claims in broadband ads,” said ASA CEO Guy Parker. “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.”

New rules

Based on its findings, the ASA says it needs to take action. It will recommend broadband providers quite all-inclusive up front and monthly costs (including line rental), greater prominence for discounts and one-off expenses.

Ofcom has welcomed the move, with CEO Sharon White claiming more transparent advertising will complement the regulator’s attempts to provide more information about speeds, coverage and customer service so consumers and businesses can make informed decisions.

“Ofcom wants to see clear and accurate broadband prices for consumers,” she said. “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.”

Industry reaction

TalkTalk said it agreed with the ASA, but stressed new rules had to be applied to the whole industry if companies were not to be penalised in what is a very competitive market.

“It’s obvious that a single headline price is much clearer and better for customers, and we’re actually already doing it on a pilot project up in York,” a spokesperson told TechWeekEurope. “But until the whole market moves to single prices, any company that advertises its products like this will struggle to compete with what look like better deals from other providers. We want Ofcom to be bold and tackle this problem in their strategic review and we would absolutely support them in doing so.”

However experts say that unless broadband providers are up front about all costs, there is still scope for consumers to be misled.

Enough action?

“The ASA’s findings focus on line rental as the primary issue,” explained Dan Howdle, telecoms expert at Cable.co.uk. “But the confusion around broadband package advertising does not solely exist because line rental is separated out – there are a plethora of additional hidden costs levied both during the purchase process and the lifetime of the contract.

“One-off costs such as installation, router postage and so-called ‘connection fees’ must also be included in advertising if we’re to properly address the issue, as should the monthly cost customers pay once the introductory period has ended.

“The only number that truly accomplishes all of that is the total cost of the contract from start to end (or at the very least the first-year cost including all one-offs and extras). The ASA’s recommendations stop short of enforcing complete transparency in this regard.”

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