Cable.co.uk comments on ASA and Ofcom study that reveals broadband prices likely mislead consumers
- Research commissioned by the Advertising Standards Authority (ASA) and Ofcom (the UK's independent telecoms regulator) has found that the current approach to broadband pricing is likely to confuse and mislead consumers
- Just 23% of participants were able to correctly identify the total cost per month after first viewing of a broadband advertisement
- As a result of the findings, the ASA suggests broadband providers no longer separate line rental cost from monthly cost, give greater prominence to contract length, post-discount pricing and up-front costs
- The ASA will decide on new broadband pricing recommendations before 30 May 2016
21 January 2016: Just moments ago, the Advertising Standards Authority (ASA) and Ofcom announced new research demonstrating how the advertising of broadband prices is likely to mislead and confuse customers about the true cost of a broadband contract.
As a result, the ASA will suggest broadband providers no longer separate line rental cost from monthly cost, give greater prominence to contract length and post-discount pricing, and draw attention to any up-front costs.
The ASA will decide on a recommended approach to the way broadband pricing is advertised by 30 May 2016
The ASA press release will be available to view online sometime on Thursday morning at: https://www.asa.org.uk/News-resources/Media-Centre.aspx. If it is not yet available, please contact the ASA for the full release
Commenting on Ofcom's findings, Dan Howdle, consumer telecoms expert at broadband comparison site Cable.co.uk, said:
"Attractive headline pricing that bears no resemblance to what you pay either at the checkout or across the lifetime of the contract has long been the bane of the UK broadband industry."
“The ASA’s findings focus on line rental as the primary issue. 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."
“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.
"Acknowledging there’s a problem is half the battle – so half the battle has indeed been won today – but complete consumer understanding of broadband contract cost from billboard to checkout is still, it would appear, some way off."
Research participants were invited to view current broadband ads and were then tested on their understanding of the presentation of pricing offers.
Main findings of the ASA and Ofcom's research
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
Notes to editors
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Dan Howdle has been plugged into the attitudes of UK broadband, TV and mobile customers for over two decades, running research fieldwork both nationally and internationally on behalf of the biggest players in the industry. Dan is now consumer telecoms analyst at Cable, as well as more formally operating in the role of its Director of Communications and Content.
An experienced broadcaster, commentator and writer, Dan has appeared on BBC TV and radio, ITV, Sky and in the national papers. Dan has advised Ofcom on issues surrounding service quality, administered Cable’s Broadband Service Quality Awards and sat on the panel of judges for the Internet Service Providers Association annual awards.