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ASA launches 'tougher approach' to misleading broadband ads

Wednesday, May 4th 2016 by Phil Wilkinson-Jones

Broadband providers are being told not to separate out the cost of line rental when advertising broadband packages.

The Advertising Standards Authority (ASA) is introducing new rules to make broadband adverts easier to understand.

From 31 October, providers will have to show all-inclusive up-front and monthly costs in ads that include price claims.

They will also have to give greater prominence to contract length, up-front costs and any post-discount pricing.

The changes follow joint research from the ASA and Ofcom, in which 81% of people shown a broadband advert were unable to calculate the total contract cost.

The study, which took place in June 2015, tested consumers’ understanding of pricing offers based on their viewing of typical broadband ads.

Of the 300 broadband customers who took part, only 23% correctly identified the total cost per month after the first viewing of an ad when asked to recall as much information as they could.

Asked the same question, 34% only provided partial information or an incorrect figure for the broadband service or line rental costs. More than a fifth (22%) were still unable to identify the total monthly cost after seeing the ad a second time.

Of those that couldn’t calculate the total cost despite a second viewing, 64% thought the headline broadband price was the total cost of the package and that line rental costs didn’t apply.

The ASA’s chief executive Guy Parker, said: “We recognise the importance of broadband services to people's lives at work and at home.

'Confuse and mislead'

“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."

He said the ASA would support the broadband industry as it moves towards changing its approach in time for the October 31 deadline.

The move has been welcomed by Citizens Advice, which has campaigned for tougher action after its own research found that 56% of the population are unable to pick out the cheapest broadband deal when looking through ads.

Chief executive Gillian Guy said: “Broadband suppliers have been misleading customers for years.

“During our campaign we found that consumers were regularly being duped by attractive headline offers that didn’t include line rental costs, which made it impossible for people to work out the best deals.

"Our evidence also shows some people are paying up to six-and-a-half times more for broadband than advertised.

“It’s good to see the Advertising Standards Authority stand up to these companies – this announcement is a major victory for consumers. It will make ads easier to understand and help ensure customers can compare prices across the market.”

Nicholas Lansman, secretary general of the Internet Service Providers' Association (ISPA), said the UK's broadband market is hugely competitive, with speeds rising and low costs for consumers.

"ISPA supports the ASA’s efforts to make it clearer and easier for consumers to understand the total cost of a broadband package," he said.

"We welcome that the ASA has taken on board our feedback and excluded providers that do not offer line rental as the market becomes more diverse with evolving products and services to consumers."

TalkTalk announced yesterday that it would be moving away from separate broadband and line rental costs in the autumn.

It said its new ‘all-in’ pricing would make things “simpler and fairer” for customers.

The provider’s consumer managing director, Tristia Harrison, said: “As long as line rental and broadband are priced separately, the temptation to advertise deals in this way will always be there.

“But it’s time for providers to be honest about this – it’s a bad habit we have all been guilty of, it doesn’t serve customers well and it’s time it stopped.”

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