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Broadband ads 'confuse and mislead' customers, say Ofcom and ASA

Thursday, January 21st 2016 by Phil Wilkinson-Jones

Broadband adverts are confusing and misleading consumers, a report from industry watchdogs has found.

Research commissioned by the Advertising Standards Authority (ASA) and Ofcom found that 81% of people shown a broadband ad were unable to calculate the total cost of the contract.

The approach currently taken by advertisers – where broadband, introductory offer, line rental, and one-off costs are presented separately – is likely to mislead consumers, the report said.

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, 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.

Nearly three quarters (74%) of the total sample thought information about one-off and ongoing costs after an introductory period was either fairly or very unclear.

The ASA said it would work with broadband providers to change the way packages are advertised and will decide on a final recommended approach for advertisers by 30 May.

The watchdog said it will suggest to providers that they advertise inclusive up-front and monthly costs and stop separating out line rental.

It will also suggest contract length, post-discount pricing and up-front costs are given greater prominence in ads.

'Hiding the true cost'

ASA CEO 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.”

Ofcom CEO Sharon White said: “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.”

The Internet Service Providers' Association (ISPA) said more detailed research is needed to corroborate the finding's of the ASA study.

Secretary general Nicholas Lansman said: "Price is only one factor when a consumer chooses a service and the engagement with an advert is only one part of a purchasing decision – we urge the ASA to consider the whole customer experience when consulting on changes to its advertising guidelines.

"The UK has a highly competitive broadband market and informed and empowered consumers are an important part of this. This is supported by Ofcom’s own figures that show the UK benefits from some of the most competitive broadband pricing.

"Beyond adverts, ISPs provide clear information if consumers engage more closely with them, for example by going to their website, visiting a shop, working with comparison and consumer websites or by calling the providers.

"This has not been reflected in the survey which is based on a small sample size with some of the reviewed adverts only being shown to eight participants."

Last month, Cable.co.uk reported on research by Citizens Advice that found 56% of people were unable to pick out the cheapest deal when comparing broadband ads.

The charity’s CEO Gillian Guy said: “Misleading broadband adverts are hiding the true cost of a contract.

“Attractive headline offers that don’t include line rental costs make it impossible for people to work out the best broadband deal on offer without doing complicated sums.

“A broadband market that works for consumers should be competing on the overall cost of the available deals rather than on how difficult they can make it for people to work this out.”

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