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'Shiny' broadband deals are actually costing Brits an extra £2.6bn a year

Thursday, May 5th 2016 by Phil Wilkinson-Jones

Complicated broadband deals are costing British consumers £2.6bn a year in unexpected fees and line rental charges, new research has claimed.

According to wireless provider Relish, broadband customers can end up spending an extra £156 a year by being locked into price-hikes once their original 12-month sign-up offer expires.

Relish’s research comes after the launch of a new, tougher approach to misleading broadband ads by the Advertising Standards Authority (ASA).

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 new rules follow a joint study by the ASA and Ofcom, which found that 81% of people shown a broadband ad were unable to calculate the total cost of a contract.

Will Harnden, chief marketing officer at Relish, said the London-based provider is in full support of moves by the ASA and Ofcom to regulate how broadband packages are advertised.

He said Relish’s study, which was carried out alongside financial advice website Moneymagpie, merely “scratches the surface” of the issues facing the broadband industry.

“We don’t think there’s any need for broadband to be as complicated as it currently is.

“We need to work together to clean up the industry and give consumers the correct information to clearly assess the best possible deals.”

'True cost'

Moneymagpie founder Jasmine Birtles said: “It’s very pleasing to see that the ASA and Ofcom are taking radical steps to regulate how these shiny broadband deals are advertised.

“Our research has demonstrated that these supposed offers are not good deals.

“We need clarity on the true cost of a broadband package and what the ‘deal’ actually means.

“Relish and Moneymagpie are both supporting the move for more transparent advertising in order to make pricing breakdowns simpler and clearer, much like Ofgem has done with gas and electricity in recent times.”

TalkTalk has already announced that it will move away from separate broadband and line rental costs, and towards ‘all-in’ pricing to makes things “simpler” for customers.

But it’s not just the pricing elements of broadband ads that can be misleading to consumers.

Cable.co.uk’s own research found that two thirds of fibre broadband customers on the Openreach network are unaware their service actually arrives at their home through a copper telephone line.

Experts said the use of the term ‘fibre broadband’ is misleading and likened the situation to the horsemeat scandal.

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